8-KMaterial AgreementsFinancial EventsExhibits & Filings

ORACLE CORP 8-K Report, Material Agreement (Apr 26, 2013)

Filed April 26, 2013For Securities:ORCLORCL-PD

Summary

Oracle Corporation (ORCL) filed an 8-K on April 26, 2013, reporting the entry into a significant new $3,000,000,000 5-year unsecured revolving credit facility. This facility, effective April 22, 2013, was established with a syndicate of lenders led by Wells Fargo Bank, National Association, and is intended for general corporate purposes, including backing its commercial paper program. The agreement includes standard covenants, notably a debt-to-capitalization ratio not exceeding 45%, and matures on April 20, 2018. Additionally, the filing details an update to Oracle's existing $3,000,000,000 commercial paper program, with new dealer and issuing/paying agency agreements finalized on April 23, 2013. Importantly, at the time of the filing, Oracle had not drawn any funds from the new credit facility nor had any commercial paper notes outstanding under its program. This proactive financing move indicates Oracle's focus on maintaining robust liquidity and financial flexibility.

Key Highlights

  • 1Oracle entered into a $3 billion, 5-year unsecured revolving credit facility on April 22, 2013.
  • 2The credit facility is intended for general corporate purposes, including backstopping commercial paper issuance.
  • 3The facility has a maturity date of April 20, 2018.
  • 4A key financial covenant requires Oracle's total net debt to total capitalization ratio not to exceed 45%.
  • 5Oracle updated its commercial paper program with new dealer and agency agreements on April 23, 2013.
  • 6No funds were borrowed under the new credit facility at the time of filing.
  • 7No commercial paper notes were outstanding under the program at the time of filing.

Frequently Asked Questions

The $3 billion credit agreement is a revolving credit facility intended for Oracle's general corporate purposes. This includes providing a financial backstop for any commercial paper that Oracle may issue, ensuring liquidity and financial flexibility.

The facility is unsecured, has a 5-year term maturing on April 20, 2018, and allows Oracle to borrow, prepay, and reborrow funds. It includes customary covenants, with a significant one being that Oracle's consolidated total net debt to total capitalization ratio cannot exceed 45%. Interest rates are based on either LIBOR or a Base Rate formula.

No, at the time of this filing (April 26, 2013), Oracle had not borrowed any funds under the new $3 billion credit facility, nor did it have any commercial paper notes outstanding under its commercial paper program. This suggests the company was maintaining strong liquidity and using these facilities primarily for contingency and flexibility.

Oracle updated its dealer agreements and the issuing and paying agency agreement for its commercial paper program on April 23, 2013. While the terms are substantially similar to previous agreements, these updates are standard practice to ensure the program operates smoothly with current banking partners and aligns with its overall treasury management.