UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On June 28, 2022, Teradata Corporation (“Teradata”) entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent and, the lenders party thereto (the “Credit Agreement”).
The Credit Agreement provides for (i) a five-year unsecured term loan in an aggregate principal amount of $500 million (the “Term Loan”), and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of up to $400 million, including a $50 million sublimit for the issuance of standby letters of credit and a $50 million sublimit for swingline loans (the “Revolving Facility” and, collectively with the Term Loan, the “Facilities”).
The Credit Agreement provides that up to $100 million of the Revolving Facility may be in loans denominated in British Pounds Sterling, Euros, and Japanese Yen. All outstanding amounts under the Credit Agreement advanced pursuant to the Revolving Facility are due and payable on June 28, 2027; however, the maturity date of the Revolving Facility may be extended by agreement of the parties for up to two additional one-year periods. The Term Loan is payable in quarterly installments of principal, commencing on June 30, 2024 (with 1.25% of the initial principal amount due on each of the first twelve payment dates), with all remaining principal due on June 28, 2027.
The outstanding principal amount under the Facilities bear interest at a floating rate based upon, at Teradata’s option, a negotiated base rate or a rate generally based on a secured overnight financing rate, plus, in each case, a margin based on Teradata’s leverage ratio. Interest is payable quarterly in arrears. In addition, the Credit Agreement provides that Teradata may request the Credit Agreement be amended to establish key performance indicators with respect to certain environmental, social, and governance (“ESG”) targets, pursuant to which certain positive or negative adjustments would be made to various fees and applicable margin based on Teradata’s performance against such ESG targets.
Borrowings under the Credit Agreement are unsecured but are guaranteed by certain of Teradata’s material domestic subsidiaries. The Credit Agreement contains customary representations and warranties, default provisions, and affirmative and negative covenants including, among others, covenants regarding the maintenance of a leverage ratio and covenants relating to financial reporting, compliance with laws, subsidiary indebtedness, liens, sale and leaseback transactions, mergers and other fundamental changes, and entry into certain restrictive agreements. Most of the covenants are subject to materiality, thresholds, and exceptions. Teradata may request an increase in the principal amounts available under the Credit Agreement in the aggregate principal amount of up to $450 million, to the extent that existing and/or new lenders agree to provide such additional amounts.
The Credit Agreement replaces Teradata’s prior revolving credit agreement in the maximum principal of $400 million and its prior term loan agreement in the principal amount of $500 million, both of which were entered into in 2018 (the “Prior Agreements”). In connection with the execution of the Credit Agreement, the $400 million term loans outstanding under the Prior Agreements was repaid in full.
Teradata has other relationships with the parties to the Credit Agreement where such party, as applicable, in the past received, and may in the future receive, customary compensation and reimbursement of expenses.
In connection with the Credit Agreement, Teradata executed an interest rate swap with a $450 million initial notional amount in order to hedge the floating rate interest on the Term Loan. The notional amount of the hedge will step-down according to the amortization schedule of the Term Loan. As a result of the swap, Teradata’s fixed rate on the initial $450 million notional amount of the Term Loan is 3.148%, plus the applicable leverage-based interest rate margin applicable to the Term Loan under the Credit Agreement.
The preceding description of the Credit Agreement is not complete and is subject to and qualified in its entirety by reference to the Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with the execution of the Credit Agreement described above, on June 28, 2022, the Prior Agreements were terminated. The material relationships between Teradata and the parties to the Prior Agreements were the same as described above. The material terms and conditions of the Prior Agreements were substantially similar to the material terms and conditions of the Credit Agreement.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure set forth under Item 1.01 is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits:
The following exhibits are attached with this current report on Form 8-K:
| Exhibit |
Description | |
| 10.1 | Credit Agreement dated as of June 28, 2022 among Teradata Corporation, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. | |
| 104 | Cover Page Interactive Data File (embedded within the 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 thereunto duly authorized.
| TERADATA CORPORATION | ||||||
| Dated: June 28, 2022 | By: | /s/ Claire Bramley | ||||
| Name: | Claire Bramley | |||||
| Title: | Chief Financial Officer | |||||