Subsequent Events

12 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

Credit Agreement Draw

On April 6, 2020, the Company borrowed the remaining $2.5 billion available under the Credit Agreement as a precautionary measure to increase its cash position and increase financial flexibility in light of continuing uncertainty in the global economy and financial capital markets resulting from the COVID-19 outbreak.

The Company expects to use the proceeds from the borrowings under the Credit Agreement for working capital, general corporate purposes or other purposes permitted under the Credit Agreement. Borrowings under the Credit Agreement will bear interest at a variable rate based on LIBOR or on a base rate, plus an individual margin based on DXC’s long-term debt rating.

Senior Notes

On April 21, 2020, DXC completed its previously announced offering of $500 million aggregate principal amount of its 4.000% Senior Notes due 2023 and $500 million aggregate principal amount of its 4.125% Senior Notes due 2025 (collectively, the “Notes”). The Company received $993 million net proceeds from the offering of the Notes, after deducting the underwriters’ discounts and the estimated expenses of the offering. The Company used the net proceeds from the offering of the Notes to prepay (i) €500 million of the €750 million term loan due fiscal 2022; (ii) £150 million of the £500 million term loan due fiscal 2022; (iii) A$300 million of the A$500 term loan due fiscal 2022; and (iv) $100 million of the $500 million term loan due fiscal 2025.

Amended Financial Covenants

On May 15, 2020, the company also amended the financial covenants in its revolver and terms loans to convert the debt to EBITDA covenant from gross debt to net debt to account for the cash amount on its balance sheet. At the same time, the company extended the tenor of its Euro term loans by one year.

Dividend

The Board of Directors has suspended the Company’s cash dividend payment beginning in the first quarter to preserve cash and provide additional flexibility in the current environment as a result of the economic impact of COVID-19. Furthermore, the Board has suspended future quarterly dividends until the significant uncertainty of the current public health crisis and global economic climate has passed and the Board determines that resumption of dividend payments is in the best interest of the Company and its stockholders.

No events, other than those described in these notes, have occurred that would require recognition or disclosure in the consolidated financial statements.