Science Applications expands revolver, adds $1.23 billion term loan

By Marisa Wong

Los Angeles, June 30 – Science Applications International Corp. entered into a fifth amendment on June 30 to its third amended and restated credit agreement dated Oct. 31, 2018 with Citibank, NA as administrative agent and collateral agent, according to an 8-K filing with the Securities and Exchange Commission.

Among other things, the amendment increases the revolving credit commitment to $1 billion and provides for a new $1.23 billion term facility.

The entirety of the term facility was borrowed on the closing date, and the proceeds were immediately used to refinance all of the term advances and term 2 advances outstanding immediately prior to giving effect to the amendment; to pay all accrued interest and fees due under the existing facility and some expenses incurred in connection with the fifth amendment; and to prepay a portion of the tranche B loans.

The new term advances will amortize quarterly beginning Oct. 31, 2023 at 1.25% of the original amount borrowed, stepping up to 1.875% on Oct. 31, 2024 and to 2.5% on Oct. 31, 2025.

The new term advances may be prepaid at any time without penalty and are subject to the same mandatory prepayments, including from excess cash flow, as the company’s prior term loans under the existing credit agreement.

The termination date of the revolving credit commitments has been extended to, and the maturity date of the new term facility is, the earlier of the date that is five years after the closing date and the date that is 91 days prior to the earliest tranche B maturity date.

From and after the closing date, all interest rates under the credit agreement have transitioned from Libor to SOFR plus 10 basis points for dollar-denominated loans, Sonia for sterling-denominated loans and Euribor for euro-denominated loans

Interest rate margins for tranche B loans and tranche B-2 loans remain unchanged. The applicable interest rate margins under the new term facility and the revolver have been reduced to a range of 75 bps to 175 bps based on the leverage ratio. Undrawn revolver commitment fees have been reduced to a range of 12.5 bps to 25 bps, also depending on the leverage ratio.

The new term advances will be subject to the same covenants as the company’s existing term loans.

The fifth amendment also contains some other conforming changes.

Science Applications is a Reston, Va.-based technology integrator.

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