8-KMaterial AgreementsExhibits & Filings

Mastercard Inc 8-K Report, Material Agreement (Nov 21, 2012)

Filed November 21, 2012For Securities:MA

Summary

Mastercard Incorporated (MA) announced the establishment of a new $3 billion committed five-year unsecured revolving credit facility, effective November 16, 2012. This facility replaces a previous, smaller credit line and provides enhanced borrowing capacity for general corporate purposes. The new credit facility matures on November 16, 2017, extending the company's liquidity runway. This strategic move demonstrates Mastercard's continued financial strength and its proactive approach to managing its capital structure. The increased credit availability offers flexibility for future investments, operational needs, or potential strategic initiatives, while the terms, including a maximum leverage ratio, indicate prudent financial management. The involvement of major financial institutions as lenders underscores the company's strong relationships within the banking sector.

Key Highlights

  • 1Mastercard entered into a new $3 billion, five-year unsecured revolving credit facility.
  • 2The new facility replaces a prior credit facility of $2.75 billion.
  • 3The credit facility is available for general corporate purposes.
  • 4Interest rates are tied to LIBOR or an alternative base rate plus applicable margins based on Mastercard's credit rating.
  • 5A key financial covenant requires maintaining a maximum consolidated leverage ratio of 3.50 to 1.00.
  • 6Restrictive covenants limit actions such as creating liens, fundamental changes, asset disposals, affiliate transactions, and entering new lines of business.
  • 7The credit facility allows for prepayment or reduction of commitments without penalty.

Frequently Asked Questions

The new $3 billion credit facility is primarily for general corporate purposes, providing Mastercard with financial flexibility and liquidity for its ongoing operations and potential strategic initiatives.

The new facility increases Mastercard's borrowing capacity from $2.75 billion to $3 billion and extends its maturity date to November 16, 2017. This provides a larger and longer-term source of potential funding.

The facility includes a financial covenant requiring Mastercard to maintain a maximum consolidated leverage ratio of 3.50 to 1.00. It also contains restrictive covenants that limit certain corporate actions, such as creating liens, disposing of assets, engaging in affiliate transactions, and entering new lines of business, subject to customary exceptions.

Citibank, N.A. serves as the managing administrative agent, and JPMorgan Chase Bank, N.A. is the administrative agent. Citigroup Global Markets Inc. and J.P. Morgan Securities, Inc. acted as lead arrangers, with other major banks also participating as joint lead arrangers and documentation agents.