| Item 1.01. | Entry into a Material Definitive Agreement |
On April 25, 2019, Juniper Networks, Inc. (“we”, “our” or the “Company”) entered into a Credit Agreement (the “New Credit Agreement”) among the Company, the lenders from time to time party thereto and Citibank, N.A. (“Citibank”), as administrative agent. Bank of America, N.A. acted as syndication agent and Citibank and Merrill Lynch, Pierce, Fenner & Smith Incorporated acted as joint lead arrangers and joint bookrunners in connection with the New Credit Agreement. The New Credit Agreement replaces the Company’s revolving credit facility provided under the Credit Agreement, dated June 27, 2014, among the Company, the lenders party thereto and Citibank, as administrative agent (as amended on November 21, 2017, the “Prior Credit Agreement”), which agreement was terminated substantially concurrently with the Company entering into the New Credit Agreement.
The New Credit Agreement provides for a $500 million unsecured revolving credit facility, with an option of the Company to increase the amount of the credit facility by up to an additional $200 million, subject to certain terms and conditions as set forth therein. Proceeds of loans made under the New Credit Agreement may be used by the Company for working capital and general corporate purposes. Revolving loans may be borrowed, repaid and reborrowed until April 25, 2024 (subject to twoone-year maturity extension options, on the terms and conditions set forth in the Credit Agreement), at which time all amounts borrowed must be repaid. Borrowings may be denominated, at the Company’s option, in U.S. dollars, pounds sterling or Euro. No loans are currently outstanding under the New Credit Agreement.
Revolving loans will bear interest, at the Company’s option, at either (i) a floating rate per annum equal to the base rate plus a margin of between 0.000% and 0.375%, depending on the Company’s public debt rating or (ii) a per annum rate equal to the reserve adjusted Eurocurrency rate, plus a margin of between 0.910% and 1.375%, depending on the Company’s public debt rating. Base rate is defined as the greatest of (A) Citibank’s prime rate, (B) the federal funds rate plus 0.500% or (C) the London interbank offered rate for deposits in U.S. dollars for a period of one month plus 1.00%. The Eurocurrency rate is determined for U.S. dollars and pounds sterling as the rate at which deposits in such currency are offered in the London interbank market for the applicable interest period and for Euro as the rate specified for deposits in Euro with a maturity comparable to the applicable interest period.
A default interest rate shall apply, at the Agent’s option or upon the request of the required lenders, on all obligations during a payment event of default under the New Credit Agreement at a rate per annum equal to 2.000% above the applicable interest rate. The Company will pay to each lender a facility fee on a quarterly basis based on the amount of each lender’s commitment to make loans, of between 0.090% and 0.250%, depending on the Company’s public debt rating. Revolving loans may be prepaid without penalty, subject to customary breakage costs for loans bearing interest at the Eurocurrency rate. The Company is also obligated to pay customary fees for a credit facility of this size and type.
The New Credit Agreement requires the Company to maintain a maximum leverage ratio and a minimum interest coverage ratio during the term of the credit facility. In addition, the New Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict the ability of the Company and its subsidiaries to, among other things, grant liens, merge or consolidate, dispose of all or substantially all of its assets, change their accounting or reporting policies, change their business and incur subsidiary indebtedness, in each case subject to customary exceptions for a credit facility of this size and type.
The New Credit Agreement includes customary events of default that, include among other things,non-payment of principal, interest or fees, inaccuracy of representations and warranties, violation of covenants, cross default to certain other indebtedness, bankruptcy and insolvency events involving the Company or its material subsidiaries, material judgments, change of control and certain ERISA events. The occurrence of an event of default could result in the acceleration of the obligations under the New Credit Agreement.
The foregoing description of the New Credit Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the New Credit Agreement. A copy of the New Credit Agreement will be filed as an exhibit to the Company’s Quarterly Report on Form10-Q for the quarter ending March 31, 2019.
