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CDK Global gets $400 million five-year term loan for general purposes
By Angela McDaniels
Tacoma, Wash., Dec. 12 – CDK Global, Inc. entered into a credit agreement on Friday that provides for a $400 million five-year senior term loan, according to an 8-K filing with the Securities and Exchange Commission.
The interest rate is Libor plus a margin that ranges from 125 basis points to 250 bps depending on the company’s ratings.
The term loan is subject to amortization in equal quarterly installments of 1.25%.
Bank of America Merrill Lynch, JPMorgan Chase Bank, NA, MUFG, Morgan Stanley Senior Funding, Inc. and Wells Fargo Securities LLC are the joint lead arrangers and joint bookrunners. JPMorgan, Morgan Stanley, MUFG and Wells Fargo Bank, NA are the syndication agents. Bank of America, NA is the administrative agent.
Borrowings will be used for general corporate purposes, which may include the repurchase of common stock.
The term loan contains financial covenants that cap the ratio of the company’s total consolidated debt to consolidated EBITDA at 3.5 to 1.0 and require it to maintain a ratio of its consolidated EBITDA to consolidated interest expense of at least 3.0 to 1.0.
Also on Friday, the company amended its Sept. 16, 2014 credit agreement with JPMorgan as administrative agent and its Dec. 14, 2015 credit agreement with Bank of America as administrative agent to, among other things, include certain bail-in language relating to EEA financial institutions and make certain changes to the definitions of change in control, consolidated EBITDA, eligible assignee and, in the case of the 2014 credit agreement, defaulting lender.
CDK is an integrated information technology and digital marketing company based in Hoffman Estates, Ill.
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