Summary
KLA Corp (KLAC) announced on November 30, 2017, the entry into a new Credit Agreement, establishing an unsecured revolving loan facility totaling $750.0 million. This facility includes the option to increase by an additional $250.0 million, providing significant financial flexibility. The primary purpose of this new facility was to repay and terminate the Company's previous credit agreement from 2014, with $250 million already drawn on the closing date for this refinancing purpose, along with cash on hand. The new credit facility matures on November 30, 2022, and allows for flexible borrowing, repayment, and reborrowing. It also features commitment fees ranging from 0.10% to 0.25% based on the Company's credit rating, and interest rates tied to either the Alternate Base Rate or Adjusted LIBO Rate, plus an applicable rate influenced by credit rating. The agreement includes standard covenants and events of default typical for such financing.
Key Highlights
- 1KLA Corp entered into a new $750 million unsecured revolving credit facility on November 30, 2017.
- 2The facility has an accordion feature allowing for an increase of up to $250 million.
- 3The primary use of the new facility was to repay and terminate the Company's prior credit agreement dated November 14, 2014.
- 4As of the closing date, $250 million was borrowed under the new facility.
- 5The revolving loan facility matures on November 30, 2022.
- 6Interest rates are variable, based on Alternate Base Rate or Adjusted LIBO Rate, plus a credit rating-dependent 'Applicable Rate'.
- 7The agreement includes financial covenants such as maximum leverage ratio and minimum interest coverage ratio.