Summary
Intuit Inc. (INTU) has filed an 8-K report detailing the establishment of a new five-year, $500 million revolving credit facility. This new facility, effective February 17, 2012, replaces a previous agreement that was set to expire in March 2012 and has now been terminated. The unsecured credit line provides Intuit with significant financial flexibility, with borrowing costs tied to its senior debt credit ratings and the choice between alternate base rates or LIBOR, plus applicable margins. The primary purpose of this new credit facility is to support Intuit's general corporate purposes, including potential future acquisitions. While the company is not currently drawing on these funds, it retains the ability to do so as strategic opportunities and operational needs arise. The agreement includes customary covenants, such as limitations on subsidiary debt and liens, and maintains key financial ratios (debt to EBITDA not exceeding 3.25:1 and EBITDA to interest payable of at least 3.00:1), indicating a commitment to maintaining a healthy financial structure.
Key Highlights
- 1Intuit established a new $500 million, five-year unsecured revolving credit facility, effective February 17, 2012.
- 2This new facility replaces and terminates a previous $500 million credit agreement that was due to expire in March 2012.
- 3The credit facility has an expiration date of February 17, 2017.
- 4Borrowing costs are variable, linked to Intuit's senior debt credit ratings, with options for alternate base rate or LIBOR.
- 5The facility can be used for general corporate purposes, including potential future acquisitions.
- 6Key financial covenants include maintaining a debt-to-EBITDA ratio of no more than 3.25:1 and an EBITDA-to-interest ratio of at least 3.00:1.
- 7Up to $100 million of the facility is available in specified foreign currencies.