Applied Materials Inc. filed SEC Form 8-K: Termination of a Material Definitive Agreement, Entry into a Material Definitive Agreement
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On February 24, 2025, Applied Materials, Inc. (“Applied”) entered into a credit agreement (the “Credit Agreement”) for a five-year $2.0 billion revolving credit facility with Bank of America, N.A., as administrative agent (the “Administrative Agent”), and the lenders party thereto (collectively, the “Lenders”).
The Credit Agreement replaces a $1.5 billion credit agreement, dated February 21, 2020, by and among Applied and certain lenders, as amended and extended, as described further in Item 1.02 below.
The Credit Agreement provides for unsecured borrowings in an initial amount not to exceed $2.0 billion outstanding at any one time and includes a sub-facility for the issuance of letters of credit of up to $400 million. The Credit Agreement includes a provision under which Applied may increase the total amount of the revolving credit facility to no more than $2.5 billion, subject to the receipt of commitments from one or more Lenders for any such increase and other customary conditions.
Borrowings under the Credit Agreement will bear interest, at Applied’s option, at a rate per annum equal to either (1) the secured overnight financing rate plus an adjustment of 0.10% (“Term SOFR”) for the selected interest period, plus the applicable margin, which will range from 0.50% to 1.00% depending on Applied’s public debt credit ratings, or (2) a rate equal to the highest of (a) a rate that is 0.50% higher than the federal funds effective rate (as the Federal Reserve Bank of New York shall set forth on its public website), (b) the rate publicly announced by the Administrative Agent as its prime rate, (c) Term SOFR for a one-month interest period plus 1.0%, and (d) 1.0%. In addition, the Credit Agreement requires Applied to pay commitment fees on the unused commitments under the Credit Agreement ranging, depending on Applied’s public debt credit ratings, from 0.04% to 0.10% per annum and customary agency and letter of credit participation fees.
The Credit Agreement contains certain affirmative and negative covenants customary for credit facilities of this type. The Credit Agreement also contains a financial covenant that requires Applied to maintain as of the last day of each fiscal quarter a ratio of (i) consolidated adjusted EBITDA for the four fiscal quarter period ending on such date to (ii) consolidated net interest expense as of such date of no less than 3.00 to 1.00. The Credit Agreement also contains customary events of defaults. The occurrence of an event of default would permit the Lenders to terminate their commitments to advance loans under the Credit Agreement and to require immediate repayment of any outstanding loans under the Credit Agreement.
Proceeds from borrowings under the Credit Agreement are available to be used for general corporate purposes. The maturity date of the Credit Agreement is February 24, 2030, at which time the outstanding amount of loans under the Credit Agreement, if any, must be repaid in full.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
The Lenders, and certain of their affiliates, have engaged in, and/or in the future may engage in, banking and other transactions with Applied, including previous credit facilities. These parties have received, and/or in the future may receive, customary compensation from Applied for these services.
| Item 1.02 | Termination of a Material Definitive Agreement. |
On February 21, 2020, Applied entered into a $1.5 billion credit agreement with certain lenders, which was previously amended and extended and which was due to expire on February 21, 2026 (the “Prior Credit Agreement”). On February 24, 2025, the Prior Credit Agreement was terminated and replaced by the Credit Agreement described under Item 1.01 above. There were no outstanding amounts due under the Prior Credit Agreement.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
As discussed under Item 1.01 above, on February 24, 2025, Applied entered into the Credit Agreement. The information set forth in Item 1.01 is incorporated herein by reference. Applied has not made any borrowings under the Credit Agreement as of this date.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 10.1 | Credit Agreement, dated as of February 24, 2025, among Applied Materials, Inc., Bank of America, N.A., as administrative agent, and the other lenders named therein | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Applied Materials, Inc. (Registrant) | ||||||
| Dated: February 27, 2025 | ||||||
| By: | /s/ Teri A. Little | |||||
| Teri A. Little | ||||||
| Senior Vice President, Chief Legal Officer and Corporate Secretary | ||||||