Summary
Intuit Inc. (INTU) announced on January 31, 2007, that it entered into a $1 billion unsecured Bridge Credit Agreement. This facility is intended to provide partial financing for Intuit's pending acquisition of Digital Insight Corporation. The agreement matures 364 days after its effective date and includes specific interest rate mechanisms tied to Citibank's base rate or LIBOR, plus a spread. A key condition for the company is the requirement to prepay the facility with proceeds from future equity issuances or debt incurrence, with certain exceptions. The Credit Agreement also imposes financial covenants on Intuit, requiring the maintenance of a consolidated debt to consolidated annual EBITDA ratio not exceeding 3.00:1.00, and a consolidated annual EBITDA to interest payable ratio of at least 3.00:1.00. The filing also outlines standard representations, warranties, covenants, and events of default, underscoring the terms and conditions under which Intuit can draw upon these funds and the potential consequences of non-compliance.
Key Highlights
- 1Intuit Inc. secured a $1 billion unsecured Bridge Credit Agreement on January 31, 2007.
- 2The primary purpose of the credit facility is to partially finance the acquisition of Digital Insight Corporation.
- 3The credit facility has a term of 364 days from its effective date.
- 4Interest rates are based on Citibank's base rate plus 0.05% or LIBOR plus 0.45%.
- 5Intuit is obligated to prepay the facility with proceeds from future equity or debt issuances, subject to exceptions.
- 6Key financial covenants include maintaining a debt-to-EBITDA ratio of no more than 3.00:1.00 and an EBITDA-to-interest ratio of at least 3.00:1.00.
- 7The agreement includes standard representations, warranties, covenants, and events of default.