Hewlett Packard Enterprise enters $4 billion revolver; HP restates loan

By Marisa Wong

Morgantown, W.Va., Nov. 5 – Hewlett Packard Enterprise Co. entered into a $4 billion revolving credit facility on Nov. 1, according to an 8-K filing with the Securities and Exchange Commission.

J.P. Morgan Securities LLC, Citigroup Global Markets Inc., BNP Paribas Securities Corp., HSBC Securities (USA) Inc. and Merrill Lynch, Pierce, Fenner & Smith, Inc. are joint lead arrangers and bookrunners with JPMorgan Chase Bank, NA and Citibank, NA as co-administrative agents and BNP Paribas, HSBC USA, NA and Bank of America, NA as co-syndication agents.

Commitments will be available for a period of five years, subject to two one-year extension periods.

Borrowings will bear interest at Libor plus a margin of between 87.5 basis points and 175 bps, depending on the company’s long-term senior unsecured debt rating.

In addition, the company will pay a commitment fee on unused commitments between 8 bps and 25 bps, also based on the long-term senior unsecured debt rating.

The credit agreement contains a covenant requiring Hewlett Packard Enterprise to not permit the ratio of consolidated EBITDA to consolidated net interest expense for any period of four consecutive fiscal quarters to be less than 3 times.

Also on Nov. 1, HP Inc., formerly Hewlett-Packard Co., entered into an amended and restated revolving credit facility for a $4 billion senior revolving credit facility. The credit agreement restates the company’s credit agreement dated April 2, 2014.

Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BNP Paribas Securities Corp., HSBC Securities (USA) Inc., Mizuho Bank, Ltd. and Merrill Lynch, Pierce, Fenner & Smith, Inc. are joint lead arrangers and joint bookrunners. Citibank, NA and JPMorgan Chase Bank, NA are co-administrative agents. BNP Paribas, HSBC USA, NA, Mizuho Bank, Ltd. and Bank of America, NA are co-syndication agents.

Commitments will be available until the period ending on April 2, 2019. That period may be extended by up to two one-year periods.

Borrowings will bear interest at Libor plus a margin of between 87.5 bps and 175 bps, depending on HP’s long-term senior unsecured debt rating.

In addition, the company will pay a commitment fee on unused commitments between 8 bps and 25 bps, also based on HP’s long-term senior unsecured debt rating.

The credit agreement contains a covenant under which HP is not to let the ratio of consolidated EBITDA to consolidated net interest expense for any period of four consecutive fiscal quarters to be less than 3 times. The agreement also contains a covenant requiring HP not to permit the ratio of consolidated total debt to consolidated EBITDA to exceed 4 times as of the last day of any fiscal quarter.

The credit agreements were completed on the same day that HP completed the previously announced separation of its enterprise technology infrastructure, software, services and financing businesses from its personal systems and printing businesses. Hewlett Packard Enterprise is now an independent company. The companies are based in Palo Alto, Calif.

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