Item 1.01 Entry into a Material Definitive Agreement.
Item 1.02 Termination of a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
On August 19, 2011, CA, Inc. (the “Company”), as a borrower, entered into an unsecured revolving
credit facility with a committed capacity of $1.0 billion (including a letter of credit
sub-facility) (the “Credit Agreement”), among the Company, Citibank, N.A. (“Citibank”), as paying
agent (the “Agent”), Citibank, Bank of America, N.A. (“BofA”), and JPMorgan Chase Bank, N.A.
(“JPMorgan”), as co-administrative agents, Citigroup Global Markets, Inc. (“Citi”), Merrill
Lynch, Pierce, Fenner & Smith Incorporated, and J.P. Morgan Securities LLC, as joint lead arrangers
and joint bookrunners, and the other banks and financial institutions party thereto. The Credit Agreement
comprises commitments from 21 financial institutions. The Credit Agreement expires August 19, 2016
(the “Termination Date”), unless the parties agree to extend the Termination Date for consecutive
one-year periods thereafter pursuant to the terms therein. Upon the approval of the Company’s Board
of Directors or a duly authorized committee, the Company may, at its option and subject to
customary conditions, request an increase in the aggregate commitment of up to $500 million.
Borrowings under the Credit Agreement will bear interest at a rate dependent on the Company’s
credit ratings at the time of the borrowing and, at the Company’s option, will be calculated
according to a base rate or a Eurocurrency rate, as the case may be, plus an applicable margin fee.
Depending on the Company’s credit ratings at the time of borrowing, the applicable margin for a
base rate borrowing ranges from 0.00% to 0.625% and the applicable margin for a Eurocurrency
borrowing ranges from 0.900% to 1.375%. At the Company’s current credit ratings, the applicable
margin would be 0.25% for a base rate borrowing and 1.10% for a Eurocurrency borrowing. In
addition, the Company must pay facility fees, payable in arrears, quarterly on the first day of
each January, April, July, and October, commencing October 1, 2011, at rates, depending on the
Company’s credit ratings, ranging from 0.100% to 0.250% of the aggregate amount of each lender’s
revolving credit commitment. Based on the Company’s current credit ratings, the facility fee is
0.15% per annum of the $1.0 billion committed amount.
The Credit Agreement contains customary covenants for transactions of this type, including two
financial covenants: (i) for the 12 months ending each quarter-end, the ratio of consolidated debt
for borrowed money to consolidated cash flow, each as defined in the Credit Agreement, must not
exceed 4.00 to 1.00 and (ii) for the 12 months as of any date, the ratio of consolidated cash flow
to the sum of interest payable on, and amortization of debt discount in respect of, all
consolidated debt for borrowed money, as defined in the Credit Agreement, must not be less than
3.50 to 1.00. In addition, the Credit Agreement provides for customary events of default,
including, among other things, defaults relating to other indebtedness of at least $100,000,000 in
the aggregate being rendered against the Company or its subsidiaries, judgments in excess of
$100,000,000 in the aggregate being rendered against the Company or its subsidiaries, the
acquisition of 40% or more by any person or group of any outstanding class of capital stock having
ordinary voting power in the election of directors of the Company, and the incurrence of certain
liabilities in excess of $100,000,000 in the aggregate under The Employee Retirement Income
Security Act of 1974.
The Credit Agreement replaces an existing unsecured $1.0 billion revolving credit facility that was
due to expire on August 29, 2012, among the Company, the banks party thereto, Citibank, as paying agent, Citibank, BofA,
JPMorgan, and Deutsche Bank AG New York Branch, as co-administrative agents, and Citi, Banc of
America Securities LLC, J.P. Morgan Securities Inc., and Deutsche Bank Securities Inc., as joint
lead arrangers and joint bookrunners (the “Prior Credit Agreement”). Borrowings under the Prior
Credit Agreement carried interest at rates dependent on the Company’s credit ratings and, at the
Company’s option, were calculated according to a base rate or a Eurocurrency rate, plus an
applicable margin and utilization fee. The applicable margin for a base rate borrowing was 0.00%
and, depending on the Company’s credit ratings, the applicable margin for a Eurocurrency borrowing
ranged from 0.27% to 0.875%. The utilization fee ranged from 0.10% to 0.25% for borrowings over 50%
of the total commitment. The Company paid facility fees quarterly at rates, depending on the
Company’s credit ratings, ranging from 0.08% to 0.375% of the final allocated amount of each lender’s full revolving credit commitment (without taking into
account any outstanding borrowings under such commitments). The Prior Credit Agreement contained
two financial covenants: (i) for the 12 months ending each quarter-end, the ratio of consolidated
debt for borrowed money to consolidated
cash flow could not exceed 4.00 to 1.00 and (ii) maintain,
as of any date, a ratio of consolidated cash flow for the 12 months ended on or immediately prior to
such date, to the sum of interest payable on, and amortization of debt discount in respect of, all
consolidated debt for borrowed money of not less than 5.00 to 1.00.
Certain of the lenders, agents and other parties to the Credit Agreement, and their affiliates,
have in the past provided, and may in the future provide, investment banking, underwriting,
lending, commercial banking and other advisory services to the Company and its subsidiaries. These
lenders, agents and other parties have received, and may in the future receive, customary
compensation from the Company and its subsidiaries for these services. Among other things, certain
of the lenders, agents and other parties to the Credit Agreement, and their affiliates, acted as
initial purchasers in the Company’s 2009 offering of debt securities, as described in the Company’s
Form 8-K dated November 13, 2009.
The foregoing description of the Credit Agreement and related matters is qualified in its entirety
by reference to the Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein
by reference.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
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| Exhibit No. |
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Description |
| 10.1 |
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Credit Agreement dated August 19, 2011. |