Cognizant refinances via $2.5 billion five-year term loan, revolver

By Susanna Moon

Chicago, Nov. 9 – Cognizant Technology Solutions Corp. and wholly owned subsidiary Cognizant Worldwide Ltd. obtained a $750 million term loan facility and a $1.75 billion revolving credit facility on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

Interest on the loans is initially Libor plus 87.5 basis points with a spread ranging from Libor plus 87.5 bps to 112.5 bps based on leverage.

The commitment fee is 7 bps and can go up to 12.5 bps.

Proceeds of the term loan were used to repay the company’s previous term loan facility, which was terminated at closing, and the revolver will be used for general corporate purposes.

JPMorgan Chase Bank, NA is the administrative agent. J.P. Morgan Securities LLC, Barclays Bank plc, BB&T Capital Markets, BNP Paribas Securities Corp. and RBC Capital Markets are the joint lead arrangers and joint bookrunners.

The new credit facilities are unsecured and will mature Nov. 6, 2023.

For the term loan, no scheduled payments are due in the first year and after that the required payments are quarterly installments of $9,375,000, with the balance due at maturity.

The agreement allows an increase in the facilities by a total amount of up to $1 billion plus the amount of voluntary prepayments of the new credit facilities.

The financial covenant requires a maximum leverage ratio of 3.5 times or for a period of up to four quarters after material acquisition transactions 3.75 times.

Barclays, BB&T Capital Markets, BNP Paribas and RBC are the syndication agents. Credit Suisse AG, Cayman Islands Branch, HSBC Bank USA, NA, Santander Bank, NA, Standard Chartered Bank, SunTrust Bank, TD Bank, NA, U.S. Bank NA and Wells Fargo Bank, NA are the documentation agents.

Bank of America, NA, Citigroup Global Markets Inc., Credit Agricole, CIB, DBS Bank Ltd., KeyBank NA, Lloyds Bank Corporate Markets, PNC Bank, NA, Societe Generale and Bank of New York Mellon are the senior managing agents.

Cognizant is a provider of information technology, consulting and business process outsourcing services based in Teaneck, N.J.

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