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JPMorgan Chase Agents $2B Revolver for Micron Technology

July 06, 2018, 07:23 AM
Filed Under: Technology

Micron Technology, Inc. entered into a Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, Joint Lead Arranger, and Joint Book Runner, HSBC Securities (USA) Inc., as Joint Lead Arranger and Joint Book Runner, certain financial institutions as additional joint lead arrangers and certain financial institutions as lenders. The Credit Agreement provides Micron with a committed $2.0 billion revolving credit facility  that matures 5 years after the effective date. The Revolving Credit Facility includes a $200 million letter of credit sublimit. The Credit Agreement also provides that, under certain circumstances, including compliance with the financial covenants described below, Micron may add one or more incremental term facilities and/or incremental revolving facilities increasing commitments under the Revolving Credit Facility with the agreement of the lenders providing any such incremental facility. As of the date of the filing of this Current Report there are no borrowings outstanding under the Credit Agreement.

The Revolving Credit Facility is scheduled to mature on July 3, 2023. Micron must repay the outstanding principal amount of all loans under the Revolving Credit Facility, together with all accrued but unpaid interest, fees and other obligations owing under the Credit Agreement on the Maturity Date.

Micron’s obligations under the Credit Agreement will be unconditionally guaranteed, on a senior secured basis, by each material restricted subsidiary of Micron (subject to certain exceptions) that creates, incurs, guarantees or otherwise becomes liable for any unsecured indebtedness not otherwise permitted under the Credit Agreement unless such material restricted subsidiary becomes a guarantor of the obligations under the Credit Agreement. As of the date of the filing of this Current Report, the only guarantor subsidiary is Micron Semiconductor Products, Inc.

Pursuant to that certain Guarantee and Collateral Agreement, dated as of July 3, 2018 (the “Guarantee and Collateral Agreement”), by and among Micron, the subsidiary guarantors from time to time party thereto, and the collateral agent, Micron’s obligations under the Credit Agreement and the guarantees of the applicable subsidiary guarantors will be secured by a first-priority lien, subject to certain exceptions, in substantially all of Micron’s assets and the assets of the subsidiary guarantors. The lien under the Guarantee and Collateral Agreement is pari passu with the lien in the same assets securing obligations under that certain Credit Agreement dated April 26, 2016 (such Credit Agreement, as amended to date, the “Term Loan Credit Agreement,”) pursuant to which Micron previously borrowed a “term loan B” scheduled to mature April 26, 2022.

The collateral and guarantees under the Credit Agreement will be suspended, at Micron’s option, upon satisfaction of the following conditions: (a) Micron achieves a corporate rating of at least Ba1/BB+/BB+ from at least two of Moody’s Investors Service, Inc. (“Moody’s,") Standard & Poor’s Ratings Services (“S&P”) and Fitch, Inc. (“Fitch,”) (b) Micron repays all outstanding amounts under the Term Loan Credit Agreement and (c) Micron and its restricted subsidiaries have no priority debt that has lien or structural seniority to obligations arising under the Credit Agreement other than such priority debt that would be permitted to be incurred under the negative covenants of the Credit Agreement during a period the collateral and guarantees have been suspended.

The collateral and guarantees under the Credit Agreement will be automatically reinstated upon Micron’s corporate rating being equal to or less than either Ba3 from Moody’s or BB- from S&P (or, if Micron also maintains a corporate rating from Fitch, Micron’s corporate rating from at least two of Moody’s, S&P and Fitch being equal to or less than Ba3/ BB-/BB-). The collateral and guarantees under the Credit Agreement may also be reinstated at any time at Micron’s option.

Borrowings under the Revolving Credit Facility will bear interest, at Micron’s option, at a base rate or LIBOR, plus an applicable interest rate margin varying depending on Micron’s corporate ratings or leverage ratio (as defined below), whichever yields a lower pricing level, after an initial fixed interest rate margin period. The additional interest rate margin for borrowings ranges from .25% to 1.00% per annum in the case of base rate borrowings and from 1.25% to 2.00% per annum in the case of LIBOR borrowings.

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