FactSet Research Systems Inc. (NYSE:FDS) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On March 29, 2019, FactSet Research Systems Inc. (“FactSet”), entered into a credit agreement (the “Credit Agreement”) between FactSet, as the borrower, PNC Bank, National Association, Bank of America, N.A. and HSBC Bank USA, National Association (as the “Lenders”) and PNC Bank, National Association, as the administrative agent (the “Administrative Agent”). The description of the Credit Agreement is qualified in its entirety by reference to the full text of the Credit Agreement attached hereto as Exhibit 10.1.
Available Credit Facility
The Credit Agreement provides for a $750,000,000 revolving credit facility (the “Revolving Credit Facility”). FactSet may request borrowings under the Revolving Credit Facility until its maturity date of March 29, 2024. The Credit Agreement also allows FactSet, subject to certain requirements, to arrange for additional borrowings for an aggregate amount of up to $500,000,000, provided that any such request for additional borrowings must be in a minimum amount of $25,000,000. At FactSet’s option, a borrowing may be in the form of a base rate loan or a LIBOR rate loan.
Borrowing
On March 29, 2019, FactSet borrowed $575,000,000 in the form of a LIBOR rate loan (the “Loan”) under the Revolving Credit Facility. The Loan was used by FactSet to retire its outstanding debt under a credit agreement between FactSet, as the borrower, and PNC Bank, National Association, as the lender, dated March 17, 2017. The proceeds of the Loan made under the Credit Agreement may be used for permitted acquisitions and general corporate purposes. The Loan matures on March 29, 2024. There are no prepayment penalties in the event that the Company elects to prepay the Loan prior to its scheduled maturity date. The principal balance is payable in full on the maturity date.
Lenders and Ratable Share of Commitment
| PNC Bank, National Association | 46.67% |
| Bank of America, N.A. | 43.33% |
| HSBC Bank USA, National Association | 10% |
Interest and Fees
Borrowings under the Loan bear interest on the outstanding principal amount at a rate equal to the daily LIBOR rate plus a rate spread based on a pricing grid. The current rate spread is 0.875%. Interest on the Loan is payable quarterly in arrears and on the maturity date.
FactSet is required to pay to the Administrative Agent (for the account of each Lender in accordance of their Ratable Share of Commitment) a commitment fee based on the daily amount by which the unused Revolving Credit Facility exceeds the borrowed amount.
Debt issuance costs incurred by FactSet, such as legal costs to review the Credit Agreement, administrative agent fees and upfront Lender fees, were approximately $0.9 million. FactSet capitalized such fees as loan origination fees, which will be amortized ratably over the term of the Credit Agreement.
Loan Covenants
The Credit Agreement contains covenants restricting certain FactSet activities, which are usual and customary for this type of loan. These covenants restrict FactSet’s ability to:
|
create, incur, assume, or suffer to exist any lien upon any property, assets or revenues, whether now owned or subsequently acquired, other than permitted liens; |
|
make non-short-term investments; |
|
create, incur, assume or allow to exist any indebtedness, other than permitted indebtedness; |
|
make fundamental changes to the assets of the business; |
|
make any disposition or enter into any agreement to make any disposition of assets, other than in the ordinary course of business and permitted dispositions; |
|
declare or make, directly or indirectly, any restricted payment, except as permitted under the Credit Agreement; |
|
change the nature of its business; |
|
enter into any transaction of any kind with any affiliate other than on an arm’s length basis; and |
|
use loan proceeds to purchase or carry margin stock. |
In addition, the Credit Agreement requires that FactSet must maintain a consolidated net leverage ratio, as measured by Consolidated Funded Indebtedness less Unrestricted Domestic Cash (capped at $75,000,000) divided by Consolidated EBITDA, below a specified level as of the end of each fiscal quarter.
Events of Default
Events of default under the Credit Agreement include non-payment, breach of covenants, material misrepresentations, cross-default events, insolvency, inability to pay debts, judgments in excess of the threshold amount, an ERISA event, invalidity of loan documents, and change of control.
Retirement of Debt
In conjunction with FactSet’s entrance into the Credit Agreement on March 29, 2019, FactSet retired its outstanding debt under a credit agreement between FactSet, as the borrower, and PNC Bank, National Association, as the lender, dated March 17, 2017. The total principal amount of the loan outstanding at the time of retirement was $575.0 million. The maturity date on the outstanding loan was March 17, 2020 and there were no prepayment penalties.
Item 9.01 Financial Statements and Exhibits
FACTSET RESEARCH SYSTEMS INC Exhibit
EX-10.1 2 ex_139950.htm EXHIBIT 10.1 ex_139950.htm Exhibit 10.1 Execution Version $750,…
To view the full exhibit click here
About FactSet Research Systems Inc. (NYSE:FDS)
Factset Research Systems Inc. is engaged in providing integrated financial information and big data analytical applications for the global investment community. The Company’s segments include the U.S., Europe and Asia Pacific. The U.S. segment services finance professionals, including financial institutions throughout the Americas. The European segment maintains offices in France, Germany, Italy, Ireland, Latvia, Luxembourg, the Netherlands, Spain, South Africa, Sweden and Dubai. The Asia Pacific segment maintains office locations in Australia, Hong Kong, Singapore and Mumbai, India. The Company delivers insight and information to investment professionals through its analytics, service, content, and technology. Its offerings include a complete services solution focused on verifying, cleaning and loading portfolio data across asset classes, and an execution management system. The Company offers third-party content through desktop, wireless and off-platform solutions.
