Business Context and Reporting Period
Company: Science Applications International Corporation (SAIC)
Filing Type: Form 8-K (Current Report)
Date of Report: June 21, 2022
Subject: Regulation FD Disclosure regarding a proposed amendment to the Third Amended and Restated Credit Agreement dated October 31, 2018.
Key Financial Metrics and Debt Structure
This filing details a proposed restructuring of the Company's credit facilities rather than reporting operational financial results. Key proposed terms include:
- Revolving Credit Commitment: Proposed increase to $1,000,000,000.
- Term Facility: Refinancing of existing Term Advances and Term 2 Advances into a new Term Facility with an immediate aggregate outstanding amount of $1,230,000,000.
- Interest Rate Margins (SOFR loans): Proposed reduction to a range of 0.75% to 1.75% per annum based on the Leverage Ratio.
- Interest Rate Margins (Base Rate loans): Proposed reduction to a range of 0.00% to 0.75% per annum based on the Leverage Ratio.
- Undrawn Commitment Fees: Proposed reduction to a range of 0.125% to 0.25% per annum based on the Leverage Ratio.
- Maturity Dates: Extension of the Revolving Credit Commitment termination date and Term Facility maturity date to five years after the amendment closing date.
Note: The filing text does not provide current revenue, profit, cash flow, or existing leverage ratios.
Material Changes and Proposed Actions
The primary material change involves the transition from LIBOR-based interest rates to SOFR-based interest rates. The proposed amendment seeks lender approval for the following specific changes:
- Refinancing existing term loans in full with a new Term Facility.
- Utilizing proceeds from the increased Term Facility to prepay Tranche B Loans and Tranche B-2 Loans.
- Extending the maturity of debt facilities by five years from the closing date.
- Reducing borrowing costs (interest margins and commitment fees) contingent on the Company's Leverage Ratio.
Outlook, Risks, and Contingencies
Status of Amendment: The proposed amendment is not final and may change materially from the version attached as Exhibit 99.1. It is currently being circulated to Tranche B and Tranche B-2 Lenders for approval.
Risks and Forward-Looking Statements: The filing includes standard forward-looking statements regarding future financing plans and business strategies. Actual results may differ materially due to risks including economic conditions and market factors. The Company undertakes no obligation to update these statements.
Legal Disclaimer: The information in Item 7.01 and Exhibit 99.1 is not deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 and shall not be incorporated by reference into other SEC filings.
Investor Verification Checklist
- Verify whether the proposed amendment to the Credit Agreement has received final approval from the lenders.
- Confirm the final closing date of the amendment to determine the new maturity dates.
- Review the final executed agreement to confirm the exact interest rate margins and commitment fees applicable to the Company's current Leverage Ratio.
- Monitor subsequent filings for any material changes to the proposed terms described in Exhibit 99.1.