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Item 1.01.
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Entry into a Material Definitive Agreement.
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On May 26, 2021, HP Inc. (the “Company”) entered into a five-year sustainability-linked revolving credit facility (the “Credit Agreement”), together with the lenders named
therein, and JPMorgan Chase Bank, N.A. (“JPMorgan”), as administrative agent. BNP Paribas served as the Sustainability Structuring Agent in connection with the Credit Agreement. The Credit Agreement provides for a senior, unsecured revolving credit
facility with aggregate lending commitments of $5,000,000,000 with an option to increase the commitments by up to an additional $1,000,000,000, subject to certain conditions. The Credit Agreement allows for revolving borrowings in US dollars, euros
and pounds sterling and provides for for swingline borrowings up to an aggregate amount of $1,500,000,000.
The Company may designate one or more of its subsidiaries as borrowers under the Credit Agreement from time to time. The Company will guarantee the borrowings of any such
subsidiaries under the Credit Agreement.
Commitments under the Credit Agreement will be available for a period ending on May 26, 2026, which period may be extended on up to two occasions for additional one-year
periods, subject to certain conditions.
Borrowings made in US dollars under the Credit Agreement will bear interest at rates per annum determined, at the Company’s option, by reference either to an alternate base
rate (“ABR”) or to LIBOR. ABR borrowings will bear interest at (a) the highest of (i) the prime rate, (ii) the NYFRB rate plus one-half of 1%, and (iii) one-month LIBOR plus 1%, plus (b) a margin of between zero and 62.5 basis points, depending on
the rating of the Company’s long-term senior unsecured debt. LIBOR borrowings will bear interest at (a) LIBOR for the relevant interest period plus (b) a margin of between 100 and 162.5 basis points, depending on the rating of the Company’s long-term
senior unsecured debt. Borrowings in other currencies will bear interest based on the benchmark rate applicable to the relevant currency plus a margin as set forth in the Credit Agreement.
In addition, the Company will pay a commitment fee on unused commitments between 9 and 22.5 basis points, depending on the rating of the Company’s long-term senior
unsecured debt.
Under the Credit Agreement, the interest margins and commitment fee rates are also subject to upward or
downward adjustments if the Company achieves, or fails to achieve, certain specified sustainability targets with respect to greenhouse gas reduction and diversity and inclusion.
The Credit Agreement contains various customary covenants that limit, among other things, the incurrence of indebtedness by subsidiaries of the Company, the grant or
incurrence of liens by the Company and its subsidiaries, and the entry into certain fundamental change transactions by the Company and its significant subsidiaries. The Credit Agreement contains a covenant pursuant to which the Company will not
permit the ratio of consolidated EBITDA to consolidated net interest expense for any period of four consecutive fiscal quarters to be less than 3.0 to 1.0. The Credit Agreement also contains a covenant pursuant to which the Company will not permit
the ratio of consolidated total debt to consolidated EBITDA to exceed 4.0 to 1.0 as of the last day of any fiscal quarter.
The Credit Agreement includes customary events of default, including events of default relating to non-payment of amounts due under the Credit Agreement, material
inaccuracy of representations and warranties, violation of covenants, non-payment or acceleration of other material indebtedness, bankruptcy and insolvency, unsatisfied material judgments and change of control. Under the Credit Agreement, if an event
of default occurs, lenders holding a majority of the revolving commitments will have the right to terminate the commitments and accelerate the maturity of any loans outstanding.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is attached hereto
as Exhibit 10.1 and is incorporated herein by reference.
In the ordinary course of their respective financial services businesses, the lenders party to the Credit Agreement, or their respective affiliates, have provided, and may
in the future provide, to the Company, and persons and entities with relationships with the Company, a variety of services, including cash management, investment research and management, commercial banking, hedging, brokerage, and advisory or other
financial and non-financial activities and services, for which they received or will receive customary fees and expenses.
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Item 1.02.
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Termination of a Material Definitive Agreement.
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On May 26, 2021, concurrently with the execution of the Credit Agreement described in Item 1.01 above, the Company terminated each of its 364 day senior unsecured revolving
credit facility, dated May 29, 2020, which was due to expire on May 28, 2021, and its second amended and restated five-year unsecured revolving credit facility, dated as of April 2, 2014, as amended and restated on November 1, 2015, as further
amended and restated on March 30, 2018, which was due to expire on March 30, 2023. The Company incurred no early termination penalties as a result of such terminations. With respect to the other parties to such terminated credit facilities, the
Company has or may have had customary banking relationships based on the provision of a variety of financial services, including cash management, investment banking, and equipment financing and leasing services, none of which are material
individually or in the aggregate with respect to any individual party.