Item 1.01.
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Entry into a Material Definitive Agreement.
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Credit Agreement
On May 17, 2018, TD Ameritrade Clearing, Inc. (TDAC), a wholly-owned subsidiary of TD Ameritrade Holding Corporation
(Parent), entered into a Credit Agreement (the Credit Agreement) with the lenders party thereto (the Lenders), led by Wells Fargo Securities, LLC, Barclays Bank PLC, Citibank, N.A., JPMorgan Chase Bank, N.A.
(JPM), U.S. Bank National Association and TD Securities (USA) LLC, as joint bookrunners and joint lead arrangers, and Wells Fargo Bank, National Association, as administrative agent, pursuant to which the Lenders have committed to make
available to TDAC a new $850 million senior unsecured revolving loan facility.
The maturity date of the Credit Agreement is
May 16, 2019. Borrowings under the Credit Agreement may be used for working capital needs and for general corporate purposes.
The
applicable interest rate under the Credit Agreement is calculated as a per annum rate equal to, at the option of TDAC, (a) LIBOR plus an applicable margin, which is currently 1.00% (Eurodollar loans) or (b) the federal funds
effective rate plus an applicable margin, which is currently 1.00% (Federal Funds Rate loans). The applicable margins for both Eurodollar loans and Federal Funds Rate loans under the Credit Agreement will be reduced in the event of
certain improvements in Parents senior unsecured long-term debt ratings (subject to a minimum of 0.75% for both Eurodollar loans and Federal Funds Rate loans) and will be increased in the event of certain reductions in Parents senior
unsecured long-term debt ratings (subject to a maximum of 1.25% for both Eurodollar loans and Federal Funds Rate loans). TDAC pays an annual commitment fee which is a percentage of the unused capacity of the Credit Agreement. The commitment fee
varies based on Parents senior unsecured long-term debt ratings and is currently 0.08%.
The Credit Agreement contains negative
covenants that limit or restrict, subject to certain exceptions, the incurrence of liens, indebtedness of TDAC and its subsidiaries, change in nature of business, mergers, consolidations, and the sale of all or substantially all of the assets of
TDAC and its subsidiaries, taken as a whole. TDAC is also required to maintain minimum consolidated tangible net worth and is required to maintain compliance with minimum regulatory net capital requirements. The Credit Agreement also contains
customary affirmative covenants, including, but not limited to, compliance with applicable law, payment of taxes, maintenance of insurance, preservation of corporate existence, keeping of proper books of record and account and maintenance of
properties.
The Credit Agreement includes events of default customary for such financings, including, but not limited to, nonpayment of
principal, interest or fees, cross-defaults to other debt, inaccuracies of representations and warranties, failure to perform negative covenants, failure to perform other terms and conditions, events of bankruptcy and insolvency, change of control
and unsatisfied judgments.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the complete
terms and conditions of the Credit Agreement, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.
First Amendment
On May 17, 2018, in connection with entry into the Credit Agreement, TDAC entered into a First Amendment with the lenders party thereto
and JPM, as administrative agent (the First Amendment) to the Credit Agreement dated as of April 21, 2017 among TDAC, the lenders and agents party thereto and JPM, as administrative agent (the Existing Credit Agreement).
The First Amendment modifies the Existing Credit Agreement to expressly permit incurrence of indebtedness pursuant to the Credit Agreement.
2
The foregoing description of the First Amendment is qualified in its entirety by reference to the
complete terms and conditions of the First Amendment, which is attached hereto as Exhibit 10.2 and incorporated by reference herein.