CDK Global closes $750 million five-year senior revolving facility

By Marisa Wong

Los Angeles, May 26 – CDK Global, Inc. entered into a credit agreement on May 24 providing for a $750 million senior unsecured revolving credit facility with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility includes a $100 million sublimit for loans denominated in euro, sterling and, if approved by the revolving lenders, other currencies.

In addition, the revolver contains an accordion feature that will allow the company to increase the available borrowing capacity up to $250 million.

Loans will mature on the fifth anniversary of the closing date, subject to up to two one-year extensions if lenders holding a majority of the revolving commitments approve such extension.

Loans bear interest at the term rate plus margins varying from 125 basis points to 225 bps, based on the company’s ratings, or, solely in the case of dollar loans, the alternate base rate plus margins ranging from 25 bps to 125 bps, depending on ratings.

The unused portion of the revolver commitments are subject to commitment fees ranging from 15 bps to 35 bps, also based on ratings.

The credit agreement contains financial covenants requiring the ratio of total consolidated indebtedness to consolidated EBITDA to not exceed 3.75 to 1.00 (or 4.25 to 1.00 after a qualified acquisition) and the ratio of consolidated EBITDA to consolidated interest expense to not be less than 3.00 to 1.00.

Borrowings are available for general corporate purposes.

Also on May 24, in connection with entering into the new revolver, the company terminated the commitments under and voluntarily paid off, using cash on hand, all of the accrued commitment fees of its revolver dated Aug. 17, 2018.

CDK Global is a Hoffman Estates, Ill.-based provider of software services for the automotive retail industry.

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