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AUTOMATIC DATA PROCESSING, INC.

(ADP)
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AUTOMATIC DATA PROCESSING INC : Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits (form 8-K)

06/10/2021 | 08:05am EDT

Item 1.01. Entry into a Material Definitive Agreement.

On June 9, 2021, Automatic Data Processing, Inc., a Delaware corporation (the "Company"), entered into a $3.75 billion 364-Day Credit Agreement (the "364-Day Facility") and a $3.20 billion Five-Year Credit Agreement (the "Five-Year Facility," and together with the 364-Day Facility, the "Facilities") with a group of lenders.

The Five-Year Facility contains an accordion feature under which the aggregate commitment can be increased by $500 million to $3.70 billion, subject to the availability of additional commitments. The 364-Day Facility replaced the Company's prior $3.225 billion 364-day facility, entered into on June 10, 2020, and the Five-Year Facility replaced the Company's prior $3.75 billion five-year facility, entered into on June 13, 2018, both of which were terminated on June 9, 2021. JPMorgan Chase Bank, N.A. acts as Administrative Agent, and Bank of America, N.A., BNP Paribas, Wells Fargo Bank, N.A. and Deutsche Bank Securities Inc., as Syndication Agents for the Five-Year Facility. JPMorgan Chase Bank, N.A. acts as Administrative Agent, and Bank of America, N.A., BNP Paribas, Wells Fargo Bank, N.A. and Deutsche Bank Securities Inc., as Syndication Agents for the 364-Day Facility. The existing $2.75 billion five-year credit agreement entered into on June 12, 2019 will continue in full force and effect.

Two borrowing options will be available under the Facilities: (i) a competitive advance option and (ii) a revolving credit option, which, in the case of the Five-Year Facility, will comprise U.S., Canadian and Euro tranche loans. The competitive advance option will be provided on an uncommitted competitive advance basis through an auction mechanism. The revolving credit will be provided on a committed basis. Under each option, amounts borrowed and repaid may be reborrowed subject to availability under each Facility.

The Lenders' commitments under the 364-Day Facility will expire on June 8, 2022 and any borrowings outstanding will mature and be payable on such date (or, at the option of the Company, subject to the accuracy of all representations and warranties and the absence of any default, on June 8, 2023). The Lenders' commitments under the Five-Year Facility will expire and the borrowings thereunder will mature on June 9, 2026. The Company may, from time to time and by written notice to the Administrative Agent given not fewer than 30 days and not more than 120 days prior to any anniversary of June 9, 2021, request that the Lenders extend the commitments under the Five-Year Facility for an additional period of one year.

Under each Facility, interest under a competitive advance option will be payable at the rates obtained from bids selected by the Company in accordance with the competitive auction procedures set forth in each Facility.

At the Company's option, under each Facility, revolving loans denominated in U.S. Dollars will bear interest at a floating rate per annum based on margin over a LIBOR-based rate for a one, three or six month interest period as selected by the Company or a margin over a floating rate per annum determined by reference to the highest of (i) JPMorgan Chase Bank, N.A.'s prime rate, (ii) the federal funds effective rate plus 0.50% per annum, and (iii) a LIBOR-based rate for a one month interest period plus 1% per annum.

At the Company's option, revolving loans under the Five-Year Facility denominated in Canadian Dollars will bear interest at a floating rate per annum based on a margin over a rate determined by reference to the average rate for bankers' acceptances with a tenor equal to the relevant interest period ("CDOR Rate") or a margin over a floating rate per annum determined by reference to the higher of the interest rate publicly announced by JPMorgan Chase Bank, N.A., Toronto Branch, as its reference rate for commercial loans denominated in Canadian Dollars in Canada, and the CDOR Rate for a one-month interest period plus 1.0% per annum or in the case of bankers' acceptances, a fixed rate per annum determined based on the discount rate applicable to the accepting bank plus acceptance fees equal to the margin applicable to CDOR Rate based loans.

At the Company's option, revolving loans under the Five-Year Facility denominated in Euros will bear interest at a floating rate per annum based on margin over a EURIBOR-based rate for a one, three or six month interest period as selected by the Company.

In addition, the Company will pay a commitment fee on the aggregate unused commitments as follows: (i) in the case of the 364-Day Facility, at a rate of 0.0175% per annum, and (ii) in the case of the Five-Year Facility, at a rate (ranging from 0.04% to 0.10%) determined by Company's issuer rating established by Fitch Ratings Inc., Standard & Poor's Ratings Services and Moody's Investors Service, Inc. Also, the Company will pay a term-out fee of 0.75% of the amount of any loans outstanding under the 364-Day Facility after June 8, 2022.



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The Facilities' other terms are substantially similar to the terms of the facility they replaced, including customary covenants that restrict the Company's and its borrowing subsidiaries' ability to create liens or other encumbrances, enter into sale and leaseback transactions and enter into consolidations, mergers and transfers of all or substantially all of their respective assets. Each Facility contains customary events of default that would permit the lenders to accelerate the loans, including the failure to make timely payments under a Facility or other material indebtedness, the failure to satisfy covenants and specified events of bankruptcy and insolvency.

The Company has agreed to guarantee any obligations of any of its subsidiaries that are entitled to borrow the funds under each Facility. Borrowings under the Facilities may be used for general corporate purposes.

The Facilities are led by J.P. Morgan Chase Bank, N.A., BofA Securities, Inc., BNP Paribas Securities Corp., Wells Fargo Securities, LLC and Deutsche Bank Securities Inc., as Joint Lead Arrangers and Joint Bookrunners. Barclays Bank PLC and MUFG, Ltd. are Documentation Agents for each of the Facilities.

Certain of the lenders under the Facilities, and their respective affiliates, have performed, and may in the future perform for the Company and its subsidiaries, various commercial banking, investment banking, underwriting and other financial advisory services, for which they have received, and will receive, customary fees and expenses.

The foregoing description is qualified in its entirety by reference to the Facilities, which are filed as Exhibits 10.1 and 10.2 hereto and incorporated herein by reference.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth above under Item 1.01 is hereby incorporated by reference into this Item 2.03.

Item 9.01. Financial Statements and Exhibits.



(d) Exhibits



Exhibit 10.1   364-Day Credit Agreement, dated as of June 9, 2021, among
             Automatic Data Processing, Inc., the Lenders party thereto, JPMorgan
             Chase Bank, N.A., as Administrative Agent, Bank of America, N.A.,
             BNP Paribas, Wells Fargo Bank, N.A. and Deutsche Bank Securities
             Inc., as Syndication Agents, and Barclays Bank PLC and MUFG Bank,
             Ltd., as Documentation Agents.

Exhibit 10.2 Five-Year Credit Agreement, dated as of June 9, 2021, among

             Automatic Data Processing, Inc., the Lenders party thereto, JPMorgan
             Chase Bank, N.A., as Administrative Agent, Bank of America, N.A.,
             BNP Paribas, Wells Fargo Bank, N.A. and Deutsche Bank Securities
             Inc., as Syndication Agents, and Barclays Bank PLC and MUFG Bank,
             Ltd., as Documentation Agents.

Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL

             document).








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Sales 2021 14 924 M - -
Net income 2021 2 532 M - -
Net Debt 2021 172 M - -
P/E ratio 2021 36,1x
Yield 2021 1,70%
Capitalization 89 693 M 89 693 M -
EV / Sales 2021 6,02x
EV / Sales 2022 5,57x
Nbr of Employees 58 000
Free-Float 66,6%
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Mean consensus HOLD
Number of Analysts 22
Last Close Price 213,44 $
Average target price 206,92 $
Spread / Average Target -3,05%
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Managers and Directors
Carlos A. Rodriguez President, Chief Executive Officer & Director
Kathleen Anne Winters Chief Financial Officer & Vice President
John P. Jones Non-Executive Chairman
Michael Anthony Bonarti Chief Administrative Officer
Richard T. Clark Independent Director
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