Item 1.01. Entry into Definitive Material Agreement.
On March 29, 2022, News Corporation (the “Company”) entered into a Credit Agreement (the “Credit Agreement”) among the Company, as administrative borrower, the lenders from time to time party thereto, Bank of America, N.A., as administrative agent, BofA Securities, Inc., JPMorgan Chase Bank, N.A. and Citibank, N.A., as syndication agents, and the other parties thereto.
The Credit Agreement provides for unsecured $1,250,000,000 credit facilities comprised of a $750,000,000 five year unsecured revolving credit facility (the “Revolving Facility”) and $500,000,000 five year unsecured term loan A credit facility (the “Term A Facility,” the loans under the Term A Facility are collectively referred to as “Term A Loans,” and the Term A Facility together with the Revolving Facility are referred to as, the “Facilities”) to the Company for general corporate purposes. The Revolving Facility has a sublimit of $100,000,000 available for issuances of letters of credit. Under the Credit Agreement, the Company may request increases with respect to either Facility in an aggregate principal amount not to exceed $250,000,000. Subject to certain conditions stated in the Credit Agreement, the Company may borrow, prepay and reborrow amounts under the Revolving Facility during the term of the Credit Agreement. The loans under the Revolving Facility will not amortize. The Term A Loans will amortize in equal quarterly installments in an aggregate annual amount equal to 0.0%, 2.5%, 2.5%, 5.0% and 5.0%, respectively, of the original principal amount of the Term A Facility for each 12-month period commencing on June 30, 2022. All amounts under the Credit Agreement with respect to the Facilities are due on March 31, 2027, unless, with respect to the Revolving Facility, the commitments are terminated earlier either at the request of the Company or, with respect to the Facilities, if an event of default occurs, by the administrative agent at the request or with the consent of the lenders (or automatically in the case of certain bankruptcy-related events). The Company may request that the maturity date of the revolving credit commitments under the Revolving Facility be extended under certain circumstances as set forth in the Credit Agreement for up to two additional one-year periods. The Company may also request that the maturity date of the Term A Facility be extended under certain circumstances as set forth in the Credit Agreement by at least one year. Additionally, interest on borrowings is based on either (a) an Alternative Currency Term Rate formula, (b) a Term SOFR formula, (c) an Alternative Currency Daily Rate or (d) the Base Rate formula, each as set forth in the Credit Agreement.
The Credit Agreement contains certain customary affirmative and negative covenants and events of default with customary exceptions, including limitations on the ability of the Company and the Company’s subsidiaries to engage in transactions with affiliates, incur liens, merge into or consolidate with any other entity, incur subsidiary debt or dispose of all or substantially all of its assets or all or substantially all of the stock of all subsidiaries taken as a whole. In addition, the Credit Agreement requires the Company to maintain an adjusted operating income net leverage ratio of not more than 3.0 to 1.0, subject to certain adjustments following a material acquisition, and a net interest coverage ratio of not less than 3.0 to 1.0. If any of the events of default occur and are not cured within applicable grace periods or waived, any unpaid amounts under the Credit Agreement may be declared immediately due and payable.
At this time, the Company has not borrowed any funds under the Credit Agreement. The Term A Loans will be borrowed by the Company on March 31, 2022.
BofA Securities, Inc., JPMorgan Chase Bank, N.A., Citibank, N.A., Morgan Stanley MUFG Loan Partners, LLC, acting through Morgan Stanley Senior Funding, Inc. and MUFG Bank, Ltd., Deutsche Bank Securities Inc., Goldman Sachs Bank USA, HSBC Bank USA, National Association and Bank of China, New York Branch acted as joint lead arrangers in respect of the Credit Agreement, BofA Securities, Inc., JPMorgan Chase Bank, N.A. and Citibank, N.A. are syndication agents and joint bookrunners under the Credit Agreement, Bank of America, N.A. is administrative agent under the Credit Agreement and the lenders include Bank of America, N.A., JPMorgan Chase Bank, N.A., Citibank, N.A., Morgan Stanley Bank, N.A., MUFG Bank, Ltd., Deutsche Bank AG New York Branch, Goldman Sachs Bank USA, HSBC Bank USA, National Association and Bank of China, New York Branch, Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia, Westpac Banking Corporation, and National Australia Bank Limited.
In the ordinary course of their respective businesses, one or more of the lenders, or their affiliates, have or may have various relationships with the Company and the Company’s subsidiaries involving the provision of a variety of financial services, including cash management, commercial banking, investment banking, advisory or other financial services, for which they received, or will receive, customary fees and expenses. In addition, the Company and the Company’s subsidiaries may have entered into or may enter into in the future certain engagements with one or more lenders or their affiliates relating to specific endeavors.
