Summary
Workday, Inc. (WDAY) has announced the execution of a new Credit Agreement, replacing its previous one dated April 2, 2020. This new agreement establishes a revolving credit facility with an aggregate principal amount of $1.0 billion, an increase from the previous $750 million revolving facility. Notably, Workday prepaid $693.75 million of its term loan and terminated the prior revolving credit facility concurrently with entering into the new agreement. The new facility matures on April 6, 2027, offering flexibility with options for extending the maturity date and allowing for penalty-free prepayment of loans and reduction of commitments.
Key Highlights
- 1Workday entered into a new $1 billion revolving credit facility, increasing its total credit capacity.
- 2The new credit facility replaces the previous agreement dated April 2, 2020.
- 3Workday prepaid $693.75 million of its existing term loan.
- 4The revolving credit facility matures on April 6, 2027, with an option to extend.
- 5The new agreement allows for penalty-free prepayment and commitment reduction.
- 6Interest rates are variable, tied to either Workday's Consolidated Leverage Ratio or its senior unsecured long-term debt rating.
- 7The agreement includes customary covenants and events of default, with a maximum leverage ratio covenant of 3.50:1.00.
Frequently Asked Questions
The new Credit Agreement provides Workday with a $1 billion revolving credit facility, replacing its previous credit lines. This is a standard financial management tool to ensure access to capital for general corporate purposes, potential acquisitions, or other strategic initiatives.
The new facility has a larger aggregate principal amount of $1 billion, an increase from the previous $750 million revolving credit facility. It also has a new maturity date of April 6, 2027, and includes updated interest rate structures based on either Workday's leverage ratio or debt rating.
As of April 7, 2022, the filing date of this report, Workday had no outstanding revolving loans under the new Credit Agreement, indicating no immediate need to draw upon the facility.
The Credit Agreement includes a financial covenant requiring Workday not to exceed a maximum leverage ratio of 3.50:1.00. This ratio can be temporarily stepped up to 4.50:1.00 following an acquisition, as defined in the agreement.