8-KMaterial AgreementsFinancial EventsOther Events+1

KLA CORP 8-K Report, Material Agreement (Nov 17, 2014)

Filed November 17, 2014For Securities:KLAC

Summary

KLA-Tencor Corporation (KLAC) announced on November 17, 2014, the successful closing of a new $1.25 billion five-year senior unsecured revolving credit and term loan facility. This facility, effective November 14, 2014, consists of $750 million in amortizing term loans and a $500 million revolving credit commitment, providing the company with significant financial flexibility and resources. This new credit facility matures on November 14, 2019, and offers access to funds at interest rates tied to LIBOR plus a margin ranging from 1.0% to 1.75%, dependent on KLA-Tencor's credit ratings. The company also incurred origination fees and will pay annual commitment fees on the undrawn portion of the revolving facility. This move is a strategic step to ensure continued access to capital for operational needs, potential investments, or strategic initiatives.

Key Highlights

  • 1KLA-Tencor secured a new $1.25 billion senior unsecured revolving credit and term loan facility.
  • 2The facility has a maturity date of November 14, 2019, providing a five-year borrowing term.
  • 3The credit facility comprises $750 million in term loans and $500 million in revolving credit commitments.
  • 4Interest rates are based on LIBOR plus a spread of 1.0% to 1.75%, varying with the company's credit ratings.
  • 5The company will pay origination fees and annual commitment fees on the undrawn revolving credit balance.
  • 6The credit agreement was executed on November 14, 2014, with JPMorgan Chase Bank, N.A. as Administrative Agent.

Frequently Asked Questions

The new credit facility provides KLA-Tencor with significant financial flexibility, offering access to up to $1.25 billion for general corporate purposes, which could include operational needs, strategic investments, research and development, or other corporate initiatives.

The facility is a five-year senior unsecured revolving credit and term loan facility totaling $1.25 billion, maturing on November 14, 2019. It includes $750 million in term loans and a $500 million revolving credit commitment. Interest rates are variable, based on LIBOR plus a margin dependent on the company's credit ratings.

KLA-Tencor paid origination fees at closing, which are being amortized over the life of the facility. Additionally, the company will pay an annual commitment fee ranging from 0.10% to 0.25% on the undrawn balance of the revolving credit facility, also dependent on its credit ratings.

Securing a large credit facility indicates the company's ability to access substantial capital, reflecting a degree of confidence from lenders. It provides a strong liquidity cushion and financial resources to support its business operations and strategic objectives, especially during periods of market uncertainty or for planned growth initiatives.