From time to time, each Dealer and/or its respective affiliates have directly and indirectly engaged, and may engage in the future, in investment and/or commercial banking transactions with the Company for which each Dealer (or such affiliates) has received, or may receive, customary compensation, fees and expense reimbursement.
The foregoing description of the ASR Agreements does not purport to be complete and is qualified in its entirety by reference to the ASR Agreements, copies of which are attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Bridge Credit Agreement
On August 1, 2024, in order to partially finance the share repurchases under the ASR Agreements, the Company and certain of its subsidiaries entered into a new $2,500 million senior unsecured bridge facility pursuant to that certain Bridge Credit Agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto, and appointed JPMorgan Chase Bank, N.A. and Goldman Sachs Lending Partners LLC, as joint lead arrangers and joint bookrunners, and Goldman Sachs Lending Partners LLC, as syndication agent.
Borrowings under the Credit Agreement (the “bridge loans”) mature on the date that is 364 days after the funding date. Borrowings under the Credit Agreement bear interest at a rate equal to the term Secured Overnight Financing Rate (including a customary credit spread adjustment, “SOFR”) plus an applicable rate that ranges from 100 basis points to 175 basis points per annum, depending on the Company’s long-term debt ratings. The applicable rate increases by 25 basis points per annum on the 90th day after the funding date, by an additional 25 basis points per annum on the 180th day after the funding date and by an additional 25 basis points per annum on the 270th day after the funding date. A duration fee of 50 basis points is payable on the amount of bridge loans outstanding as of the 90th day after the funding date, an additional duration fee of 75 basis points is payable on the amount of bridge loans outstanding as of the 180th day after the funding date and an additional duration fee of 100 basis points is payable on the amount of bridge loans outstanding as of the 270th day after the funding date.
The Credit Agreement contains provisions requiring the reduction of the commitments of the lenders and the prepayment of outstanding bridge loans by the amount of net cash proceeds resulting from certain sales or dispositions of assets by the Company or its subsidiaries and certain capital markets issuances by the Company or its subsidiaries, in each case subject to exceptions set forth in the Credit Agreement.
The Credit Agreement contains customary representations and warranties and usual and customary affirmative and negative covenants. The Credit Agreement also contains certain customary events of default. After the funding date, if an event of default under the Credit Agreement occurs and is continuing, the principal amount outstanding, and all accrued unpaid interest and other amounts owed, may be declared immediately due and payable.
A copy of the Credit Agreement is included herein as Exhibit 10.3 and is incorporated herein by reference. The foregoing description of the Credit Agreement is qualified in its entirety by reference to the full text of the Credit Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The information set forth under “Bridge Credit Agreement” in Item 1.01 above is hereby incorporated by reference into this Item 2.03.
