Summary
Micron Technology, Inc. (MU) has entered into a new $2.0 billion revolving credit facility, maturing in five years on July 3, 2023. This facility, established on July 3, 2018, provides significant financial flexibility and is secured by substantially all of Micron's assets and those of its subsidiary guarantors. Notably, as of the filing date, there were no outstanding borrowings under this new credit line, indicating a proactive approach to liquidity management. The credit agreement includes provisions for adding incremental term or revolving facilities, further enhancing Micron's ability to access capital as needed. The facility is governed by financial covenants, including a maximum leverage ratio of 2.75x (with a temporary increase to 3.00x following acquisitions) and a minimum interest coverage ratio of 3.50x. These covenants aim to ensure the company maintains a healthy financial position while utilizing this credit line.
Key Highlights
- 1Secured a new $2.0 billion revolving credit facility with a 5-year maturity.
- 2Facility is secured by a first-priority lien on substantially all of Micron's and subsidiary guarantors' assets.
- 3No borrowings were outstanding under the new facility at the time of filing, suggesting strong current liquidity.
- 4Includes options to add incremental term and revolving facilities for future capital needs.
- 5Key financial covenants include a maximum leverage ratio (2.75x, temporary 3.00x) and a minimum interest coverage ratio (3.50x).
- 6Collateral and guarantees can be suspended if Micron achieves certain credit ratings (Ba1/BB+/BB+ from at least two agencies) and repays its existing term loan.
- 7The agreement contains standard representations, warranties, affirmative and negative covenants, and events of default typical for such credit facilities.