CISCO SYSTEMS, INC. (NASDAQ:CSCO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
On March30, 2017, Cisco Systems, Inc. (Cisco) entered into a
364-Day Credit Agreement (the Credit Agreement) by and among
Cisco, certain lenders party thereto (the Lenders) including Bank
of America, N.A. (Bank of America), which will serve as
administration agent and a Lender.
The Credit Agreement provides for a $2,000,000,000 unsecured
revolving credit facility (the Facility) that is scheduled to
expire on March29, 2018 (the Termination Date), provided that
Cisco will have the option, on the Termination Date, with notice
to the Lenders and upon payment of an upfront fee equal to 0.50%
of the amount of any such loan outstanding on the Termination
Date, to convert such loan into a term loan maturing no later
than the first anniversary of the TerminationDate.
The Credit Agreement will be used for working capital and general
corporate purposes. At this time, Cisco has not borrowed any
funds under the Credit Agreement.
The interest rate applicable to outstanding balances under the
Credit Agreement will be based on either (i)the higher of (a)the
rates on overnight Federal Funds transactions with members of the
Federal Reserve System (i.e., Federal Funds rate) plus 0.50%, (b)
Bank of Americas prime rate as announced from time to time or
(c)the London Interbank Offered Rate (LIBOR) for an interest
period of one month plus 1.00%, or (ii)LIBOR plus a margin that
is based on Ciscos senior debt credit ratings as published by SP
Global Rating, a business unit of Standard Poors Financial
Services LLC, and Moodys Investors Service, Inc. Cisco will pay
an annual commitment fee during the term of the Credit Agreement
which may vary depending on Ciscos credit ratings.
The Credit Agreement contains customary representations and
warranties as well as customary affirmative and negative
covenants. Negative covenants include, among others, limitations
on incurrence of liens and secured indebtedness, and limitations
on incurrence of any indebtedness by Ciscos subsidiaries.In
addition, the Credit Agreement requires that Cisco maintain a
ratio of consolidated EBITDA to consolidated interest expense of
not less than 3.00 to 1.00.
The Credit Agreement also contains customary events of default.
Upon the occurrence and during the continuance of an event of
default, the Lenders may declare the outstanding loans and all
other obligations under the Credit Agreement immediately due and
payable.
Merrill Lynch, Pierce, Fenner Smith Incorporated, Deutsche Bank
Securities Inc., Citigroup Global Markets, Inc., JPMorgan Chase
Bank, N.A., and Wells Fargo Securities, LLC are acting as joint
lead arrangers and joint bookrunners for the Facility.
Cisco and its affiliates maintain various commercial and service
relationships with certain of the Lenders and their affiliates in
the ordinary course of business. In the ordinary course of their
respective businesses, certain of the Lenders and the other
parties to the Facility and their respective affiliates have
engaged, and may in the future engage, in commercial banking,
investment banking, financial advisory or other services with
Cisco and its affiliates for which they have in the past
received, and/or may in the future receive, customary
compensation and expense reimbursement.
The description of the Credit Agreement contained herein is
qualified in its entirety by reference to the Credit Agreement, a
copy of which is filed herewith as Exhibit10.1 and is
incorporated herein by reference.
Item2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Increase of Commercial Paper Program Capacity to
$10,000,000,000
Effective March31, 2017 Cisco increased, from $3,000,000,000 to
$10,000,000,000, the size of its commercial paper program (the
Program) capacity. The dealer agreements with each of JP Morgan
Securities LLC, Goldman Sachs Co. and Merrill Lynch, Pierce,
Fenner Smith Incorporated and an Issuing and Paying Agent
Agreement (the Agency Agreement) with Bank of America, National
Association remain in effect, and the form of dealer agreement
and the Agency Agreement are filed as Exhibits 10.1 and 10.2,
respectively, to the Quarterly Report on Form 10-Q of Cisco
Systems, Inc. previously filed with the SEC on February23, 2011.
$2,000,000,000 364-Day Credit
Agreement
On March30, 2017,
Cisco entered into the Credit Agreement described in Item 1.01
above, which information is incorporated by reference into this
Item 2.03.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
|
Exhibit No. |
Description of Document |
|
| 10.1 |
364-Day Credit Agreement dated as of March30, 2017, by and among Cisco Systems, Inc., the Lenders party thereto, and Bank of America, N.A., as administration agent and a Lender. |
About CISCO SYSTEMS, INC. (NASDAQ:CSCO)
Cisco Systems, Inc. designs and sells a range of products, provides services and delivers integrated solutions to develop and connect networks around the world. The Company operates through three geographic segments: Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific, Japan and China (APJC). The Company groups its products and technologies into various categories, such as Switching; Next-Generation Network (NGN) Routing; Collaboration; Data Center; Wireless; Service Provider Video; Security, and Other Products. In addition to its product offerings, the Company provides a range of service offerings, including technical support services and advanced services. The Company delivers its technology and services to its customers as solutions for their priorities, including cloud, video, mobility, security, collaboration and analytics. The Company serves customers, including businesses of all sizes, public institutions, governments and service providers. CISCO SYSTEMS, INC. (NASDAQ:CSCO) Recent Trading Information
CISCO SYSTEMS, INC. (NASDAQ:CSCO) closed its last trading session up +0.06 at 33.80 with 12,801,588 shares trading hands.