CDK Global enters $250 million five-year senior term loan facility

By Marisa Wong

Morgantown, W.Va., Dec. 15 – CDK Global, Inc. entered into a credit agreement on Dec. 14 for a $250 million senior unsecured term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

Merrill Lynch, Pierce, Fenner & Smith Inc., MUFG, U.S. Bank NA and Wells Fargo Securities, LLC are the joint lead arrangers and joint bookrunners with Bank of America, NA as administrative agent and MUFG Union Bank NA, U.S. Bank NA and Wells Fargo Bank, NA as syndication agents.

The term loan was available in a single drawing on Monday.

The five-year facility will be subject to amortization in equal quarterly installments of 1.25% of the aggregate principal amount of term loans made on the closing date, with any unpaid principal due at maturity.

Borrowings will be used for general corporate purposes, which may include the repurchase of common stock as part of a new return of capital plan and under an accelerated share buyback.

The term loan will bear interest at the same rates as those of the company’s credit agreement dated Sept. 16, 2014. The applicable spread for Libor loans ranges from 112.5 basis points to 200 bps, depending on the company’s ratings.

The new credit agreement contains some financial covenants, namely that (a) the ratio of total consolidated debt to consolidated EBITDA is not to exceed 3.5 to 1 and (b) the ratio of consolidated EBITDA to consolidated interest expense is to be a minimum of 3.0 to 1.

CDK is an integrated information technology and digital marketing company based in Hoffman Estates, Ill.

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