8-KEarnings & ResultsMaterial AgreementsFinancial Events+1

Palo Alto Networks Inc 8-K Report, Material Agreement (Sep 6, 2018)

Filed September 6, 2018For Securities:PANW

Summary

Palo Alto Networks, Inc. (PANW) announced on September 5, 2018, the entry into a new Credit Agreement, establishing an unsecured revolving loan facility with an initial principal amount of $400.0 million. This facility has the potential to be expanded up to $750.0 million through additional commitments from existing or new lenders, subject to certain conditions. The proceeds from this credit facility are designated for general corporate purposes, providing the company with increased financial flexibility. The agreement matures on September 4, 2023, or 91 days prior to the maturity of its 0.75% Convertible Senior Notes due 2023, under specific conditions related to outstanding notes and unrestricted cash. The Credit Agreement includes customary covenants, such as maintaining a leverage ratio not exceeding 3.50 to 1.00 and an interest coverage ratio of at least 3.00 to 1.00, beginning January 31, 2019. The filing also references a press release dated September 6, 2018, announcing the company's financial results for the fiscal fourth quarter and full year ended July 31, 2018, though the details of these results are not provided within the 8-K text itself.

Key Highlights

  • 1Palo Alto Networks entered into a $400 million unsecured revolving credit facility, with an option to expand up to $750 million.
  • 2The credit facility is intended for general corporate purposes.
  • 3The facility matures on September 4, 2023, or is subject to an earlier termination based on conditions related to convertible notes.
  • 4The agreement includes covenants requiring the maintenance of specific leverage and interest coverage ratios.
  • 5Company is required to maintain a leverage ratio not exceeding 3.50:1.00 starting Q1 2019.
  • 6Company is required to maintain an interest coverage ratio of at least 3.00:1.00 starting Q1 2019.
  • 7The filing also incorporates by reference a press release detailing Q4 and full-year fiscal 2018 financial results.

Frequently Asked Questions

The primary purpose of the Credit Agreement is to provide Palo Alto Networks with financial flexibility for its general corporate purposes. This includes potential funding for operations, investments, or other strategic initiatives.

The initial aggregate principal amount available under the Credit Agreement is $400.0 million. The Company has the option to arrange for up to an additional $350.0 million, bringing the total potential aggregate amount to $750.0 million, subject to certain requirements.

The company must maintain a leverage ratio not to exceed 3.50 to 1.00 and an interest coverage ratio of at least 3.00 to 1.00, tested as of the last day of each fiscal quarter, beginning January 31, 2019.

The Credit Agreement matures on the earlier of (i) September 4, 2023, or (ii) 91 days prior to the maturity of the Company's 0.75% Convertible Senior Notes due 2023, if certain conditions related to outstanding notes and unrestricted cash are met.