Item 1.01 Entry into a Material Definitive Agreement
On November 14, 2019, Mastercard Incorporated (the “Company”) entered into a committed five-year unsecured $6,000,000,000 revolving credit facility (the “Credit Facility”) with Citibank, N.A. as managing administrative agent; JPMorgan Chase Bank, N.A. as administrative agent; Citibank, N.A. and JPMorgan Chase Bank, N.A. as joint lead arrangers, joint book managers and global coordinators; Bank of China, New York Branch, Deutsche Bank Securities Inc., U.S. Bank, National Association, BofA Securities, Inc., and Bank of America, N.A. as joint lead arrangers, joint book managers, syndication agents and/or regional coordinators; and Barclays Bank PLC, Commerzbank AG, New York Branch, Goldman Sachs Bank USA, HSBC Bank USA, N.A., Industrial and Commercial Bank of China Limited, New York Branch, Lloyds Bank Corporate Markets PLC, Mizuho Bank, Ltd., MUFG Bank, Ltd., National Westminster Bank PLC, PNC Bank, N.A., Santander Bank, N.A., Societe Generale, and Wells Fargo Bank, National Association as joint lead arrangers, joint book managers and/or documentation agents; and the other lenders and agents from time to time party thereto. The Credit Facility, which expires on November 14, 2024, amended and restated the Company’s prior $4,500,000,000 credit facility which was to expire on November 15, 2023.
The Credit Facility provides the Company with a revolving line of credit with a borrowing capacity of up to $6,000,000,000. Borrowings under the Credit Facility are available in U.S. dollars and/or Euros for general corporate purposes. Borrowings under the Credit Facility would bear interest at the London Interbank Offered Rate (LIBOR) or an alternative base rate for the relevant currency, in each case plus applicable margins that fluctuate based on the applicable long-term issuer rating (or, if not available, the counterparty rating) of the Company. The Company has agreed to pay a facility fee which will fluctuate based on the Company’s applicable rating.
Certain other material terms of the Credit Facility include:
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restrictive covenants (subject, in each case, to certain customary exceptions and amounts) which limit the Company’s ability to, among other things: (a) create liens (excluding, among other things, (i) liens not exceeding the greater of (x) $600,000,000 or (y) 4% of consolidated total assets of the Company or (ii) deposits in connection with the purchase price for an acquisition); (b) effect fundamental changes to the Company and its subsidiaries, including a merger or sale of substantially all of the assets of the Company, or a liquidation or dissolution of the Company (c) dispose of assets outside of the ordinary course of business (excluding, among others, the sale of property in any period of twelve consecutive months not exceeding 25% of the Company’s consolidated total assets); and (d) engage in transactions with affiliates that are not on fair or reasonable terms;
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customary events of default, upon the occurrence of which, after any applicable grace period, the lenders will have the ability to accelerate all outstanding loans thereunder and terminate the commitments;
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the option for the Company to prepay, terminate or reduce the commitments under the Credit Facility at any time without penalty in a minimum amount of $10.0 million;
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the right to designate one or more subsidiaries of the Company as Subsidiary Borrowers that may borrow under the commitments made available under the Credit Facility, subject to customary conditions and subject to the unconditional guarantee provided by the Company with respect to any such borrowings and any other obligations, if any, of the Subsidiary Borrowers under the Credit Facility; and
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customary representations and warranties.
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The majority of the Credit Facility lenders are customers or affiliates of customers of Mastercard International Incorporated, the Company’s operating subsidiary. Certain of the lenders under the Credit Facility, or their affiliates, have provided, and may in the future from time to time provide, certain commercial and investment banking, financial advisory and other services in the ordinary course of business for the Company and its subsidiaries, for which they have in the past and may in the future receive customary fees and commissions.