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FedEx closes on $1.75 billion five-year revolving credit agreement
By Tali Rackner
Norfolk, Va., Nov. 18 – FedEx Corp. entered into a $1.75 billion five-year credit agreement on Nov. 13 with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The new credit agreement replaces the company’s $1 billion five-year credit agreement dated as of April 26, 2011.
The agreement provides for an up to $1.75 billion unsecured multi-currency revolving credit facility, including a $500 million sublimit for letters of credit.
The facility matures on Nov. 13, 2020 and may be increased by up to an additional $2 billion.
Interest is equal to Libor plus 75 basis points to 150 bps, based on the company’s debt ratings. The commitment fee ranges from 8 bps to 20 bps, also based on ratings. In addition, FedEx will pay a fronting fee of 12.5 bps per year on the undrawn and unexpired amount of each issued letter of credit.
The financial covenant requires FedEx to maintain at the end of each fiscal quarter a maximum ratio of consolidated total debt to consolidated EBITDA of 3.5 times.
Borrowings may be used for general corporate purposes, including acquisitions.
At closing, the company had not made any cash borrowings under the agreement but had rolled over $318,356,080 in outstanding letters of credit issued under the terminated agreement.
Bank of America, NA, Citibank, NA and Bank of Nova Scotia are co-documentation agents. J.P. Morgan Securities LLC, Merrill Lynch, Piece, Fenner & Smith Inc., Citigroup Global Markets Inc. and Bank of Nova Scotia are joint lead arrangers and bookrunners.
Located in Memphis, Tenn., FedEx is a shipping and logistics management company.
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