Item 1.01. Entry into a Material Definitive Agreement.
On
Borrowings under the Credit Agreement bear interest at a rate determined, at our option, based on either an alternate base rate or a LIBOR rate plus, in each case, an applicable margin that varies depending on the credit rating of the Borrower. The Borrower will pay to the lenders under the Revolving Facility a commitment fee equal to a certain percentage of the aggregate daily amount of unused commitments under the Revolving Facility. The applicable margin and commitment fee rate will be determined as shown in the following table:
LIBOR Margin ABR Margin Commitment Fee Rate Ratings (S&P/Moody's/Fitch) (% per annum) (% per annum) (% per annum) Level 1 BBB+/Baa1/BBB+ or above 1.125% 0.125% 0.125% Level 2 BBB/Baa2/BBB 1.250% 0.250% 0.150% Level 3 BBB-/Baa3/BBB- 1.375% 0.375% 0.200% Level 4 BB+/Ba1/BB+ 1.625% 0.625% 0.250% Level 5 BB/Ba2/BB or below 1.750% 0.750% 0.300%
Based on our current ratings, the applicable margin for LIBOR-denominated borrowings and commitment fee rate are 1.375% and 0.200%, respectively.
The Credit Agreement contains certain customary representations and warranties,
as well as certain customary affirmative and negative covenants. The Credit
Agreement's negative covenants restrict the activities of the Loan Parties and
--------------------------------------------------------------------------------
enter affiliate transactions. The Credit Agreement also restricts the ability of
The financial covenants in the Credit Agreement require that the Borrower maintains, as of the last day of each fiscal quarter (beginning with the second fiscal quarter of 2020), (1) a ratio of adjusted consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") of not more than 3.75 to 1.00, subject to two increases to 4.50 to 1.00 following a material acquisition, and (2) a ratio of EBITDA to consolidated interest expense of not less than 3.50 to 1.00.
The Credit Agreement also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, ERISA events, material monetary judgments, change of control events, inability to pay debts as they become due, actual or asserted invalidity of guarantees and the material inaccuracy of our representations and warranties.
The foregoing description does not purport to be complete and is subject to and is qualified in its entirety by reference to all of the provisions of the Credit Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
On the Closing Date, the Borrower repaid in full all indebtedness, and terminated all commitments, under, and discharged and released all guarantees and liens existing in connection with the Terminated Credit Agreements.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangements or Registrant.
The descriptions of the financing arrangements in Item 1.01 of this Current Report are incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits. (d) Exhibits. The following exhibit is furnished with this report. Exhibit 10.1 Credit Agreement, datedJanuary 17, 2020 , by and amongLeidos Holdings, Inc. ,Leidos, Inc. , the guarantors party thereto, the lenders party thereto andCitibank, N.A ., as administrative agent. Exhibit 104 The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
© Edgar Online, source