Item 1.01. Entry into a Material Definitive Agreement.
On May 13, 2021, Cisco Systems, Inc. ("Cisco") entered into the Second Amended
and Restated Credit Agreement (the "Credit Agreement") by and among Cisco,
certain lenders party thereto (the "Lenders") and Bank of America, N.A., as
administration agent, swing line lender, a letter of credit issuer and
sustainability coordinator. The Credit Agreement provides for a five year
$3.0 billion unsecured revolving credit facility (the "Facility"), which
includes a $250 million sublimit for the issuance of standby letters of credit,
a $250 million sublimit for swingline loans, a $1.0 billion sublimit for
borrowings or letters of credit denominated in currencies other than U.S.
dollars, a provision permitting Cisco from time to time to increase the amount
of borrowing up to $2.0 billion (for an aggregate total of up to $5.0 billion in
available borrowing), and a provision that allows for the maturity of the credit
facility to be extended for an additional year up to two times.
The Credit Agreement is an amendment and restatement of that certain Amended and
Restated Credit Agreement, dated as of May 15, 2020, by and among Cisco, certain
lenders party thereto and Bank of America, N.A., as administration agent, swing
line lender and a letter of credit issuer.
The interest rate applicable to outstanding loans under the Credit Agreement
will be based on Cisco's senior debt credit ratings as published by Standard &
Poor's Financial Services, LLC and Moody's Investors Service, Inc., plus either
(a) with respect to loans in U.S. dollars, (i) LIBOR or (ii) the Base Rate (to
be defined as the highest of (x) the Bank of America prime rate, (y) the Federal
Funds rate plus 0.50% and (z) a daily rate equal to one-month LIBOR plus 1.0%),
(b) with respect to loans in Euros, EURIBOR, (c) with respect to loans in Yen,
TIBOR and (d) with respect to loans in Pounds Sterling, SONIA plus a credit
spread adjustment. Cisco will pay a quarterly commitment fee during the term of
the Credit Agreement, which may vary depending on Cisco's senior debt credit
ratings. In addition, the Credit Agreement incorporates certain
sustainability-linked mechanics. Specifically, Cisco's applicable interest rate
and commitment fee are subject to upward or downward adjustments if Cisco
achieves, or fails to achieve, certain specified targets based on two key
performance indicator metrics: (i) Social Impact and (ii) Foam Reduction.
The Credit Agreement contains customary representations and warranties as well
as customary affirmative and negative covenants. Negative covenants include,
among others, limitations on incurrence of liens and secured indebtedness, and
limitations on incurrence of any indebtedness by Cisco's subsidiaries. In
addition, the Credit Agreement requires that Cisco maintain a ratio of
consolidated EBITDA to consolidated interest expense of not less than 3.0 to
1.0.
The Credit Agreement also contains customary events of default. Upon the
occurrence and during the continuance of an event of default, the Lenders may
declare the outstanding loans and all other obligations under the Credit
Agreement immediately due and payable.
BofA Securities, Inc., Deutsche Bank Securities Inc., Citibank, N.A., J.P.
Morgan Securities LLC and Wells Fargo Securities, LLC are acting as joint lead
arrangers and joint bookrunners for the Facility.
Cisco and its affiliates maintain various commercial and service relationships
with certain of the Lenders and their affiliates in the ordinary course of
business. In the ordinary course of their respective businesses, certain of the
Lenders and the other parties to the Credit Agreement and their respective
affiliates have engaged, and may in the future engage, in commercial banking,
investment banking, financial advisory or other services with Cisco and its
affiliates for which they have in the past and/or may in the future receive
customary compensation and expense reimbursement.
The description of the Credit Agreement contained herein is qualified in its
entirety by reference to the Credit Agreement, a copy of which is filed herewith
as Exhibit 10.1 and is incorporated herein by reference.
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Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description of Document
10.1 Second Amended and Restated Credit Agreement, dated as of May 13,
2021, by and among Cisco Systems, Inc., certain lenders party thereto,
and Bank of America, N.A., as administration agent, swing line lender,
L/C issuer and sustainability coordinator.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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