Executive Brief

  • Applied Materials, Inc. entered into a $2.0 billion unsecured revolving credit facility on September 25, 2025, with Bank of America, N.A. as administrative agent and other lenders (Item 1.01).
  • The facility has a 364-day term, maturing September 24, 2026, with an option to convert outstanding loans to term loans maturing September 24, 2027, subject to a 0.75% fee (Item 1.01).
  • Interest rates are based on Term SOFR plus 0.50%-1.00% margin or a prime-based alternative rate; commitment fees on unused amounts range from 0.04% to 0.10% depending on credit ratings (Item 1.01).
  • The credit agreement includes customary affirmative and negative covenants and a financial covenant requiring a minimum consolidated adjusted EBITDA to net interest expense ratio of 3.00 to 1.00 (Item 1.01).
  • No borrowings have been made under the facility as of the filing date (Item 2.03).
  • Proceeds are for general corporate purposes (Item 1.01).
  • The credit agreement is filed as Exhibit 10.1 (Item 9.01).
  • The lenders and their affiliates have existing and potential future banking relationships with Applied (Item 1.01).
  • No new financial guidance, officer changes, or other material events were disclosed.
  • Key risk to monitor: compliance with financial covenants and potential default events triggering immediate repayment (Item 1.01).

Item-by-Item Analysis

Item 1.01 – Entry into a Material Definitive Agreement

  • What happened: Applied Materials entered into a $2.0 billion unsecured revolving credit facility with Bank of America, N.A. as administrative agent and other lenders on September 25, 2025.
  • Parties/terms:
    • Borrowing limit: $2.0 billion, with an option to increase to $3.0 billion subject to lender commitments.
    • Term: 364 days, maturing September 24, 2026.
    • Conversion option: outstanding loans can be converted to term loans maturing September 24, 2027, with a 0.75% fee.
    • Interest rates:
      • Option 1: Term SOFR + margin (0.50%-1.00% based on Applied’s public debt credit ratings).
      • Option 2: Highest of (a) federal funds effective rate + 0.50%, (b) prime rate, (c) Term SOFR for one month + 1.0%, or (d) 1.0%.
    • Commitment fees on unused commitments: 0.04% to 0.10% per annum depending on credit ratings.
    • Covenants: customary affirmative and negative covenants; financial covenant requiring consolidated adjusted EBITDA to consolidated net interest expense ratio ≥ 3.00 to 1.00 quarterly.
    • Events of default: customary, allowing lenders to terminate commitments and demand immediate repayment.
    • Use of proceeds: general corporate purposes.
  • Conditions/closing: Effective September 25, 2025; no borrowings made as of filing.
  • Source: (Item 1.01, entire section), (Exhibit 10.1).

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

  • What happened: The credit agreement described in Item 1.01 constitutes a direct financial obligation.
  • Borrowings: None as of the report date.
  • Source: (Item 2.03).

Item 9.01 – Financial Statements and Exhibits

  • Exhibit 10.1: Credit Agreement dated September 25, 2025, among Applied Materials, Bank of America, N.A., and other lenders.
  • Exhibit 104: Inline XBRL cover page.
  • Source: (Item 9.01).

Exhibits Summary

  • Exhibit 10.1: Full Credit Agreement detailing terms summarized above.
  • No press releases or investor decks attached.

Financial & Dilution Impact

  • No borrowings drawn yet; no immediate cash impact.
  • Potential future interest expense depends on borrowings and interest rate elected.
  • No dilution or equity impact.
  • Financial covenant imposes leverage discipline (adjusted EBITDA to net interest expense ≥ 3.00x).

Timeline & Required Actions

  • Credit facility effective September 25, 2025.
  • Maturity date: September 24, 2026.
  • Option to convert outstanding loans to term loans maturing September 24, 2027.
  • Borrowings subject to customary conditions.
  • No immediate drawdown required.

Risks & Monitoring

  • Risk of event of default triggering immediate repayment.
  • Compliance with financial covenant (adjusted EBITDA to net interest expense ratio ≥ 3.00).
  • Interest rate variability depending on credit ratings and market rates.
  • Potential increase in facility size to $3.0 billion subject to lender commitments.

Metadata & Quality Checks

  • No OCR or formatting issues detected.
  • Non-GAAP reconciliation referenced only in context of EBITDA definition (customary).
  • Forward-looking statements not explicitly referenced.
  • No related-party conflicts disclosed beyond standard lender relationships.

Final Checklist

  • Items disclosed: 1.01, 2.03, 9.01.
  • No other Items present.
  • Exhibit 10.1 filed and incorporated by reference.
  • No financial statements or pro forma financials required.
  • No officer/director changes or governance amendments.
  • No restatements or auditor changes.

Summary

Applied Materials secured a $2 billion revolving credit facility with flexible terms and customary covenants to support general corporate needs, with no current borrowings. Investors should monitor covenant compliance and potential drawdowns affecting liquidity and interest expense.

Original Filing