Applied Materials Inc.
09/26/2025 | Press release | Distributed by Public on 09/26/2025 14:20
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01 Entry into a Material Definitive Agreement.
On September 25, 2025, Applied Materials, Inc. ("Applied") entered into a credit agreement (the "Credit Agreement") for a 364-day $2.0 billion revolving credit facility with Bank of America, N.A., as administrative agent (the "Administrative Agent"), and the lenders party thereto (collectively, the "Lenders").
The Credit Agreement provides for unsecured borrowings in an initial amount not to exceed $2.0 billion outstanding at any one time. The Credit Agreement includes a provision under which Applied may increase the total amount of the revolving credit facility to no more than $3.0 billion, subject to the receipt of commitments from one or more Lenders for any such increase and other customary conditions.
Borrowings under the Credit Agreement will bear interest, at Applied's option, at a rate per annum equal to either (1) the secured overnight financing rate ("Term SOFR") for the selected interest period, plus the applicable margin, which will range from 0.50% to 1.00% depending on Applied's public debt credit ratings, or (2) a rate equal to the highest of (a) a rate that is 0.50% higher than the federal funds effective rate (as the Federal Reserve Bank of New York shall set forth on its public website), (b) the rate publicly announced by the Administrative Agent as its prime rate, (c) Term SOFR for a one-month interest period plus 1.0%, and (d) 1.0%. In addition, the Credit Agreement requires Applied to pay commitment fees on the unused commitments under the Credit Agreement ranging, depending on Applied's public debt credit ratings, from 0.04% to 0.10% per annum and customary agency fees.
The Credit Agreement contains certain affirmative and negative covenants customary for credit facilities of this type. The Credit Agreement also contains a financial covenant that requires Applied to maintain as of the last day of each fiscal quarter a ratio of (i) consolidated adjusted EBITDA for the four fiscal quarter period ending on such date to (ii) consolidated net interest expense as of such date, of no less than 3.00 to 1.00. The Credit Agreement also contains customary events of defaults. The occurrence of an event of default would permit the Lenders to terminate their commitments to advance loans under the Credit Agreement and to require immediate repayment of any outstanding loans under the Credit Agreement.
Proceeds from borrowings under the Credit Agreement are available to be used for general corporate purposes. The maturity date of the Credit Agreement is September 24, 2026; provided, however, if any loans are outstanding on the maturity date, the Credit Agreement provides that Applied may, at its option, convert all or part of such loans to term loans that shall have a maturity date of September 24, 2027, subject to payment by Applied of a fee equal to 0.75% of the amount of the converted loans and other customary conditions. On the applicable maturity date, the outstanding amount of loans under the Credit Agreement, if any, must be repaid in full.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
The Lenders, and certain of their affiliates, have engaged in, and/or in the future may engage in, banking and other transactions with Applied, including previous and existing credit facilities. These parties have received, and/or in the future may receive, customary compensation from Applied for these services.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
As discussed under Item 1.01 above, on September 25, 2025, Applied entered into the Credit Agreement. The information set forth in Item 1.01 is incorporated herein by reference. Applied has not made any borrowings under the Credit Agreement as of this date.
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