Summary
Mastercard Inc. (MA) announced on November 14, 2019, the establishment of a new, committed five-year unsecured revolving credit facility totaling $6,000,000,000. This new facility replaces and increases the Company's prior $4,500,000,000 credit line, extending its maturity to November 14, 2024. The expanded credit capacity is available for general corporate purposes in U.S. dollars and Euros. This significant increase in available liquidity demonstrates Mastercard's strong financial standing and provides ample flexibility for strategic initiatives, potential acquisitions, or managing working capital needs. The credit facility's terms include customary covenants, events of default, and options for early prepayment without penalty, offering operational flexibility. Notably, many of the lenders are also customers or affiliates of customers, indicating established banking relationships.
Key Highlights
- 1Mastercard entered into a new $6 billion unsecured revolving credit facility, increasing its borrowing capacity from the previous $4.5 billion.
- 2The new credit facility has a five-year term, expiring on November 14, 2024.
- 3The funds are available for general corporate purposes and can be drawn in U.S. dollars and/or Euros.
- 4Interest rates are based on LIBOR or an alternative base rate plus a margin that varies with Mastercard's credit rating.
- 5The agreement includes restrictive covenants, with customary exceptions, limiting actions such as creating liens, fundamental corporate changes, asset disposals outside the ordinary course, and affiliate transactions.
- 6Mastercard has the option to prepay, terminate, or reduce commitments under the facility at any time without penalty.
- 7Many lenders in the facility are existing customers or affiliates of customers, highlighting strong banking partnerships.