Cadence Design Systems Enters New Agreement, Terminates Another

TL;DR

CDNS inked a new deal, ditched an old one, and took on new financial obligations. Details TBD.

AI Summary

On August 14, 2024, Cadence Design Systems, Inc. entered into a material definitive agreement and simultaneously terminated another. The company also incurred a direct financial obligation under an off-balance sheet arrangement. Specific details regarding the nature of these agreements and obligations are not fully disclosed in this initial filing.

Why It Matters

This filing indicates significant changes in Cadence's contractual and financial obligations, which could impact its future operations and financial performance.

Risk Assessment

Risk Level: medium — The filing indicates material definitive agreements and new financial obligations, suggesting potential shifts in business strategy or financial structure that warrant closer examination.

Key Players & Entities

• CADENCE DESIGN SYSTEMS, INC. (company) — Registrant
• August 14, 2024 (date) — Date of earliest event reported
• Delaware (jurisdiction) — State of Incorporation
• 000-15867 (commission_file_number) — SEC File Number
• 2655 Seely Avenue, San Jose, California 95134 (address) — Address of Principal Executive Offices
• (408) 943-1234 (phone_number) — Registrant's telephone number

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share CDNS Nasdaq Global
• $1.25 billion — ms, Inc. (the "Company") entered into a $1.25 billion five-year senior unsecured revolving cr
• $250 million — acquisition by the Company of at least $250 million that results in a pro forma leverage ra

Filing Documents

• cdns-20240814.htm (8-K) — 38KB
• ex101cdns08142024.htm (EX-10.1) — 1034KB
• ex102cdns08142024.htm (EX-10.2) — 819KB
• ex103cdns08142024.htm (EX-10.3) — 799KB
• 0000813672-24-000162.txt ( ) — 3247KB
• cdns-20240814.xsd (EX-101.SCH) — 2KB
• cdns-20240814_lab.xml (EX-101.LAB) — 21KB
• cdns-20240814_pre.xml (EX-101.PRE) — 12KB
• cdns-20240814_htm.xml (XML) — 3KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Credit Agreement On August 14, 2024, Cadence Design Systems, Inc. (the "Company") entered into a $1.25 billion five-year senior unsecured revolving credit facility (the "Facility") pursuant to a credit agreement (the "Credit Agreement") with Bank of America, N.A., as a lender and administrative agent, the other lenders and issuing banks party thereto and BofA Securities, Inc., JPMorgan Chase Bank, N.A. and HSBC Bank USA, National Association, as joint lead arrangers and joint bookrunners. The Credit Agreement replaces the Company's existing revolving credit agreement, dated June 30, 2021 (as previously amended, the "Existing Credit Agreement"), among the Company, Bank of America, N.A., as a lender and administrative agent, and the other lenders party thereto. Proceeds from the Facility may be used for working capital, capital expenditures and other general corporate purposes. Amounts outstanding under the Credit Agreement will accrue interest at a rate equal to, at the Company's option, either (1) Term SOFR (as defined in the Credit Agreement) plus a margin of between 0.625% and 1.125% per annum depending on the Company's debt rating, plus a credit spread adjustment of 0.10%, or (2) base rate plus a margin of between 0.0% and 0.125% per annum depending on the Company's debt rating. The Credit Agreement includes customary negative covenants that, among other things, restrict the Company's ability to incur additional indebtedness, grant liens and make certain asset dispositions. In addition, the Credit Agreement contains a financial covenant that requires the Company to maintain a funded debt to Consolidated EBITDA (as defined in the Credit Agreement) ratio not greater than 3.50 to 1, with a step-up to 4.00 to 1 for one year following an acquisition by the Company of at least $250 million that results in a pro forma leverage ratio between 3.25 to 1 and 3.75 to 1. The foregoing description is qualified in it

02 Termination of a Material Definitive Agreement

Item 1.02 Termination of a Material Definitive Agreement. Concurrently with entering into the Credit Agreement, on August 14, 2024, the Company terminated all remaining commitments of the lenders under the Existing Credit Agreement. There were no outstanding borrowings under the Existing Credit Agreement at the time of termination. 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 on Form 8-K is hereby incorporated by reference into this Item 2.03.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 10.1 Credit Agreement, dated August 14, 2024, by and among Cadence Design Systems, Inc., Bank of America, N.A., as a lender and administrative agent, the other lenders and issuing banks party thereto and BofA Securities, Inc., JPMorgan Chase Bank, N.A. and HSBC Bank USA, National Association, as joint lead arrangers and joint bookrunners. 10.2 First Amendment to Loan Agreement, dated August 14, 2024, with respect to that certain Loan Agreement, dated September 7, 2022, by and among Cadence Design Systems, Inc., Bank of America, N.A. and the other lenders party thereto. 10.3 First Amendment to Loan Agreement, dated August 14, 2024, with respect to that certain Loan Agreement, dated May 30, 2024, by and among Cadence Design Systems, Inc., Bank of America, N.A. and the other lenders party thereto. 104 Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

SIGNATURES 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. Dated: August 14, 2024 CADENCE DESIGN SYSTEMS, INC. By: /s/ John M. Wall John M. Wall Senior Vice President and Chief Financial Officer