STOCK TITAN

New $5.7B and $3.5B revolving credit facilities for ADP (NASDAQ: ADP)

Filing Impact
(High)
Filing Sentiment
(Neutral)
Form Type
8-K

Rhea-AI Filing Summary

Automatic Data Processing, Inc. (ADP) entered into two new unsecured revolving credit facilities totalling significant committed liquidity. The company signed a $5.7 billion 364-Day Credit Agreement and a $3.5 billion Five-Year Credit Agreement with a syndicate of lenders, replacing its prior $4.55 billion 364-day and $3.5 billion five-year facilities, which were terminated the same day.

The 364-day facility’s commitments expire on June 25, 2027, with an option to term out borrowings to June 25, 2028, while the five-year facility matures on June 26, 2031 and includes a $500 million accordion feature. Borrowings are revolving, may be reborrowed, and are available in multiple currencies under the five-year facility.

U.S. dollar loans bear floating interest based on a margin over Term SOFR or an alternative base rate, and ADP will pay unused commitment fees (0.0175% annually on the 364-day facility and 0.04%–0.10% on the five-year facility) plus a 0.75% term-out fee on any 364-day loans outstanding on June 25, 2027. The new facilities include customary covenants and events of default, are guaranteed by ADP for borrowing subsidiaries, and may be used for general corporate purposes.

Positive

  • None.

Negative

  • None.

Insights

ADP refinances and modestly upsizes its syndicated bank backstop, keeping terms conventional.

ADP replaced a $4.55 billion 364-day line with a $5.7 billion facility and renewed a $3.5 billion five-year facility with similar covenant structures. These are committed, unsecured revolving lines that function primarily as liquidity backstops rather than term funding.

The five-year facility now includes a $500 million accordion, potentially lifting its capacity to $4 billion, and offers multicurrency tranches. Pricing is standard for an investment-grade borrower, tied to Term SOFR or a base-rate grid, plus unused commitment fees ranging from 0.0175% to 0.10% depending on ratings.

From an investor’s perspective, this maintains strong access to bank liquidity with limited change in leverage mechanics. The agreements preserve typical covenants and default triggers, including liens, sale-leasebacks, and bankruptcy events, so the overall credit profile impact appears neutral pending future borrowing levels disclosed in subsequent filings.

Item 1.01 Entry into a Material Definitive Agreement Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01 Financial Statements and Exhibits Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
364-Day Facility Size $5.7 billion New 364-Day Credit Agreement entered June 26, 2026
Five-Year Facility Size $3.5 billion New Five-Year Credit Agreement entered June 26, 2026
Five-Year Accordion $500 million Potential increase in five-year facility commitments to $4.0B
364-Day Commitment Fee 0.0175% per annum Annual fee on unused commitments under 364-Day Facility
Five-Year Commitment Fee Range 0.04%–0.10% per annum Annual fee on unused five-year commitments, rating-based
364-Day Term-Out Fee 0.75% of loans outstanding Applies to any 364-day loans outstanding on June 25, 2027
364-Day Commitment Expiry June 25, 2027 End of commitments under 364-Day Facility
Five-Year Maturity June 26, 2031 Maturity date of Five-Year Facility borrowings
364-Day Credit Agreement financial
"entered into a $5.7 billion 364-Day Credit Agreement (the “364-Day Facility”)"
Five-Year Credit Agreement financial
"a $3.5 billion Five-Year Credit Agreement (the “Five-Year Facility”)"
accordion feature financial
"The Five-Year Facility contains an accordion feature under which the aggregate commitment can be increased"
An accordion feature is a clause in a loan or financing agreement that allows a company to expand the size of a credit line or the amount of securities available under the same contract without drafting a completely new deal. Like a suitcase that can be extended to hold more items, it gives a company quick flexibility to raise extra money, which can help fund growth but may increase debt or dilute existing shareholders—so investors watch it for changes in risk and ownership.
Term SOFR-based rate financial
"based on a margin over a Term SOFR-based rate for a one, three or six month interest period"
commitment fee financial
"the Company will pay a commitment fee on the aggregate unused commitments"
A commitment fee is a charge a lender applies to a borrower for keeping a loan or line of credit available, even before any money is drawn. Think of it as a reservation fee for borrowing power; the borrower pays to ensure funds will be there when needed. Investors care because it adds to a company’s borrowing cost, affects cash flow and liquidity, and can signal lenders’ willingness to extend credit.
events of default financial
"Each New Facility contains customary events of default that would permit the lenders to accelerate the loans"
Events of default are specific breaches or failures listed in a loan, bond, or credit agreement that give lenders the right to act, such as demanding immediate repayment, raising interest rates, or taking secured assets. They matter to investors because triggering one is like setting off a financial alarm: it raises the chance of foreclosure, restructuring, or bankruptcy and can sharply reduce the value of a company’s stock or bonds and increase borrowing costs.
See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google
Add on Google
Learn about SEC filing dates
false 0000008670 0000008670 2026-06-26 2026-06-26 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

 

 

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

 

Date of Report (Date of earliest event reported): June 26, 2026

 

Automatic Data Processing, Inc.
(Exact name of registrant as specified in its charter)
 

 

Delaware   1-5397   22-1467904

(State or other jurisdiction

of incorporation or organization)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

One ADP Boulevard, Roseland, New Jersey 07068
(Address of principal executive offices) (Zip Code)
   
(973) 974-5000
(Registrant's telephone number, including area code)
 
N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)  

Name of each exchange

on which registered

Common Stock, $0.10 Par Value (voting)   ADP   NASDAQ Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

   

 

Item 1.01Entry into a Material Definitive Agreement.

On June 26, 2026, Automatic Data Processing, Inc., a Delaware corporation (the “Company”), entered into a $5.7 billion 364-Day Credit Agreement (the “364-Day Facility”) and a $3.5 billion Five-Year Credit Agreement (the “Five-Year Facility,” and together with the 364-Day Facility, the “New Facilities”) with a group of lenders (the “Lenders”).

The Five-Year Facility contains an accordion feature under which the aggregate commitment can be increased by $500 million to an aggregate principal amount of $4 billion, subject to the availability of additional commitments. The 364-Day Facility replaced the Company’s prior $4.55 billion 364-day facility, entered into on June 27, 2025, and the Five-Year Facility replaced the Company’s prior $3.5 billion five-year facility, entered into on June 28, 2024, both of which were terminated on June 26, 2026. 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 each of the New Facilities.

The New Facilities will have a revolving credit option, which in the case of the Five-Year Facility is comprised of U.S. Dollar, Canadian Dollar and Euro tranche loans. The revolving credit will be provided on a committed basis. Amounts borrowed and repaid may be reborrowed subject to availability under each New Facility.

The Lenders’ commitments under the 364-Day Facility will expire on June 25, 2027 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 25, 2028). The Lenders’ commitments under the Five-Year Facility will expire and the borrowings thereunder will mature on June 26, 2031. 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 26, 2026, request that the Lenders extend the commitments under the Five-Year Facility for an additional period of one year.

At the Company’s option, under each New Facility, revolving loans denominated in U.S. Dollars will bear interest at a floating rate per annum based on a margin over a Term SOFR-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) the prime rate, (ii) the federal funds effective rate plus 0.50% per annum, and (iii) a Term SOFR-based rate for a one month interest period plus 1% per annum.

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 to each Lender a term-out fee of 0.75% of the amount of any loans outstanding under the 364-Day Facility on June 25, 2027.

The New 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 New Facility contains customary events of default that would permit the lenders to accelerate the loans, including the failure to make timely payments under the New Facilities 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 the New Facilities. Borrowings under the New Facilities may be used for general corporate purposes.

The New 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 Bank, Ltd. are Documentation Agents for each of the New Facilities.

   

 

Certain of the Lenders, 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 New Facilities, which are filed as Exhibits 10.1 and 10.2 hereto and incorporated herein by reference.

Item 2.03Creation 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 9.01Financial Statements and Exhibits.

(d)       Exhibits

Exhibit 10.1   364-Day Credit Agreement, dated as of June 26, 2026, 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 26, 2026, 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).

 

 

   

 

 

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.

 

 

Date: June 26, 2026 AUTOMATIC DATA PROCESSING, INC.  
         
  By:

/s/ David Kwon

 
    Name: David Kwon  
    Title: Vice President  

 

 

 

 

   

 

FAQ

What new credit facilities did ADP (ADP) enter into on June 26, 2026?

Automatic Data Processing entered a new $5.7 billion 364-day credit facility and a $3.5 billion five-year credit facility. Both are unsecured, revolving arrangements with a syndicate of lenders and replace the company’s prior 364-day and five-year facilities.

When do ADP’s new 364-day and five-year credit facilities mature?

The 364-day facility commitments expire June 25, 2027, with an option to term out borrowings to June 25, 2028. The five-year facility matures June 26, 2031, with potential one-year extensions requested around each anniversary of June 26, 2026.

How large can ADP’s new five-year credit facility become with the accordion feature?

The five-year facility includes a $500 million accordion feature, allowing its aggregate commitment to increase from $3.5 billion to $4.0 billion, subject to additional lender commitments. This feature expands potential committed liquidity without renegotiating the entire agreement.

What interest rates apply to borrowings under ADP’s new credit facilities?

U.S. dollar loans under each facility bear interest at a floating rate based on a margin over either a Term SOFR-based rate or an alternative base rate. The base rate references the highest of the prime rate, the federal funds rate plus 0.50%, or one‑month Term SOFR plus 1%.

What fees will ADP pay on its new 364-day and five-year credit facilities?

ADP will pay a 0.0175% annual commitment fee on unused amounts under the 364-day facility and 0.04%–0.10% annually on the five-year facility, tied to its issuer ratings. It also owes a 0.75% term-out fee on any 364-day loans outstanding on June 25, 2027.

What will ADP use the new credit facilities for?

The filing states that borrowings may be used for general corporate purposes. That typically includes funding working capital, potential acquisitions, share repurchases, or other corporate needs, but the agreement itself does not restrict use beyond customary covenant limits.

Filing Exhibits & Attachments

5 documents