UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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| Item 1.01. | Entry into a Material Definitive Agreement. | ||||
On January 5, 2023 (the “Closing Date”), Micron Technology, Inc. (the “Company”), entered into an Incremental Amendment No. 1 to the Term Loan Credit Agreement (the “Incremental Term Loan Amendment”), by and among the Company, the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent. The Incremental Term Loan Amendment amends the Term Loan Credit Agreement, dated as of November 3, 2022, by and among the Company, Wells Fargo Bank, National Association, as Administrative Agent, Wells Fargo Securities, LLC, Mizuho Bank, Ltd., and Truist Securities, Inc. as Joint Bookrunners and Joint Lead Arrangers, and certain financial institutions as lenders (and as may be amended, restated, amended and restated, supplemented or otherwise modified from time to time, including by the Incremental Term Loan Amendment, the “Term Loan Credit Agreement”).
The Incremental Term Loan Amendment provides a committed incremental term loan facility (the “Incremental Term Loan Facility”) consisting of three tranches of term loans in an aggregate principal amount of $600 million. On the Closing Date, the company borrowed $125 million in aggregate principal amount of incremental Term A-1 loans (“Incremental Term A-1 Loans”), $250 million in aggregate principal amount of incremental Term A-2 loans (“Incremental Term A-2 Loans”), and $225 million in aggregate principal amount of incremental Term A-3 loans (“Incremental Term A-3 Loans”, and collectively the “Incremental Term Loans”). The Company will use the proceeds of such Incremental Term Loans for general corporate purposes, including capital expenditures.
The Incremental Term A-1 Loans, the Incremental Term A-2 Loans, and the Incremental Term A-3 Loans each have terms that are identical to, and will be treated as a single class with, the existing Term A-1 loans, the existing Term A-2 loans, and the existing Term A-3 loans, as applicable, under the Term Loan Credit Agreement. Incremental Term A-1 Loans do not amortize. Incremental Term A-2 Loans and Incremental Term A-3 Loans each amortize in equal quarterly installments in an amount equal to 1.25% of the original principal amount of such Incremental Term A-2 Loans or Incremental Term A-3 Loans, as applicable. Incremental Term A-1 Loans are scheduled to mature on November 3, 2025, Incremental Term A-2 Loans are scheduled to mature on November 3, 2026, and Incremental Term A-3 Loans are scheduled to mature on November 3, 2027 (each a “Term Loan Facility Maturity Date”). The Company must repay the outstanding principal amount of the applicable loans under the Incremental Term Loans, together with all accrued but unpaid interest, fees, and other obligations owing thereon, on the applicable Term Loan Facility Maturity Date.
Borrowings under the Incremental Term Loan Facility will bear interest, at the Company’s option, at adjusted term SOFR or at a “base rate”, plus in either case an applicable interest rate margin varying by tranche and depending on the Company’s corporate ratings. The additional interest rate margin for borrowings ranges from 1.00% to 2.00% per annum in the case of adjusted term SOFR borrowings and 0.00% to 1.00% in the case of base rate borrowings. The adjusted term SOFR is defined as the term SOFR reference rate for the selected interest period, plus 0.10% per annum (subject to a 0.00% floor).
The Company is also required to pay other customary fees and costs in connection with the Incremental Term Loan Facility.
The Incremental Term Loan Facility is otherwise subject to the same terms and conditions as those set forth in the Term Loan Credit Agreement, including but not limited to conditions precedent to borrowing, representations and warranties, affirmative and negative covenants, financial covenants and events of default. The Company is required to maintain, on a consolidated basis, a leverage ratio of total indebtedness to EBITDA, as defined in the Term Loan Credit Agreement and calculated as of the last day of each fiscal quarter, not to exceed 3.25 to 1.00, subject to a temporary four fiscal quarter increase in such maximum ratio to 3.75 to 1.00 following certain material acquisitions.
The lenders under the Incremental Term Loan Amendment and their affiliates have engaged in, and may in the future engage in, other commercial dealings in the ordinary course of business with the Company or its affiliates, including the provision of investment banking, investment management, commercial banking and cash management services, foreign exchange and commodity hedging, and equipment financing and leasing services.
| 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 under Item 1.01 of this Current Report is incorporated herein by reference.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| MICRON TECHNOLOGY, INC. | |||||||||||
| Date: | January 5, 2023 | By: | /s/ Mark Murphy | ||||||||
| Name: | Mark Murphy | ||||||||||
| Title: | Executive Vice President and Chief Financial Officer | ||||||||||