Summary
Lam Research Corporation (LRCX) filed an 8-K on March 10, 2015, detailing significant financial activities. The company amended its existing $300 million unsecured revolving credit facility, removing covenants that restricted its ability to incur liens and pay dividends or make loans among subsidiaries. This amendment offers greater financial flexibility. In addition, the company announced the successful issuance of $1 billion in senior notes, split equally between $500 million in 2.750% Senior Notes due 2020 and $500 million in 3.800% Senior Notes due 2025. This substantial debt issuance, executed under a registration statement, indicates the company's strategy to fund its operations or growth initiatives. Investors should note the increased leverage and the terms of the new debt.
Key Highlights
- 1Amendment to $300 million unsecured credit facility executed on March 5, 2015.
- 2Credit agreement amendment removed restrictions on liens and intercompany financial arrangements (dividends, loans).
- 3Issuance of $500 million aggregate principal amount of 2.750% Senior Notes due 2020.
- 4Issuance of $500 million aggregate principal amount of 3.800% Senior Notes due 2025.
- 5Total senior notes issuance amounted to $1 billion.
- 6Underwriting agreement signed with J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated for the note offering.
- 7The debt issuance was conducted under the company's Form S-3 registration statement.