Cognizant Technology Solutions Corporation
10/06/2026 | Press release | Distributed by Public on 10/06/2026 14:33
Material Agreement, Financial Obligation (Form 8-K)
Item 1.01. Entry into a Material Definitive Agreement.
On October 5, 2026 (the "Closing Date"), Cognizant Technology Solutions Corporation (the "Borrower" and together with its consolidated subsidiaries, the "Company") and Cognizant Worldwide Limited (the "Designated Borrower" and, together with the Borrower, the "Borrowers"), a wholly-owned subsidiary of the Borrower, entered into a new credit agreement (the "Credit Agreement") by and among the Borrower, the Designated Borrower, certain financial institutions party thereto and JPMorgan Chase Bank, N.A., as administrative agent, providing for a term loan facility in the amount of $550 million (the "Term Loan Facility") and a revolving credit facility of $1.85 billion (the "Revolving Credit Facility" and together with the Term Loan Facility, the "New Credit Facilities"). Proceeds from the Term Loan Facility were used primarily to repay the term loan facility that was part of the Borrower's existing credit facilities, which were terminated on the Closing Date. The Borrower also borrowed approximately $1.0 billion under the Revolving Credit Facility on the Closing Date, the proceeds of which were used primarily to repay the revolving credit facility that was part of such existing credit facilities. The Revolving Credit Facility will be used for general corporate purposes. The New Credit Facilities are unsecured.
The New Credit Facilities mature on October 3, 2031 (the "Maturity Date"). No scheduled payments of the Term Loan Facility are due in the first year after the Closing Date; thereafter, the required payments on the Term Loan Facility are quarterly installments of $6.875 million, with the balance due and payable on the Maturity Date. The Revolving Credit Facility terminates on the Maturity Date, and loans thereunder may be borrowed, repaid and reborrowed up to such date.
Loans under the New Credit Facilities will, at the Borrowers' option, bear interest at either the Term Benchmark (as defined in the Credit Agreement) or the ABR Rate (as defined in the Credit Agreement), plus, in each case, an applicable margin, initially 0.875% in respect of Term Benchmark loans and RFR loans and 0% in respect of ABR Rate loans. The applicable rates will be determined by reference to the lower of the rate available under (i) a grid based upon the Borrower's Index Debt Rating (as defined in the Credit Agreement) if the Borrower has received public index debt ratings from certain ratings agencies and (ii) a grid based upon the Company's ratio (the "Leverage Ratio") of indebtedness of borrowed money to Consolidated EBITDA (as defined in the Credit Agreement).
The Borrowers may request an increase in the New Credit Facilities by an aggregate amount not to exceed $1.2 billion plus the amount of voluntary prepayments of the New Credit Facilities, subject to certain conditions described in the Credit Agreement.
The New Credit Facilities are subject to customary affirmative and negative covenants as well as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires that the Company not be in excess of a maximum Leverage Ratio of 3.50:1.00, or, at the Borrower's election for a period of up to four quarters following certain material acquisition transactions, 4.00:1.00.
This description of the Credit Agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of the Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.
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