Cognizant Technology Solutions Corporation entered into a new credit agreement on October 5, 2026. The agreement, executed by Cognizant Technology Solutions Corporation and its wholly-owned subsidiary Cognizant Worldwide Limited, establishes a combined credit facility valued at $2.4 billion.
The facility consists of two components: a $550 million term loan facility and a $1.85 billion revolving credit facility. Both facilities are unsecured and are set to mature on October 3, 2031.
On the closing date, Cognizant utilized the proceeds from the term loan to repay an existing term loan facility, which was terminated as part of the transaction. Additionally, the company borrowed approximately $1.0 billion under the revolving credit facility on the closing date, using those funds to repay an existing revolving credit facility.
Under the terms of the agreement, the term loan requires no scheduled payments during the first year following the closing. Beginning in the second year, quarterly installments of $6.875 million are due, with the remaining balance payable on the maturity date. The revolving credit facility allows for borrowing, repayment, and reborrowing up to the maturity date.
Interest on the loans will be determined by the Borrowers' option and will be based on either the Term Benchmark or the ABR Rate, plus an applicable margin. The applicable margin is initially set at 0.875% for Term Benchmark and RFR loans, and 0% for ABR Rate loans. The final rate is determined by reference to the lower of a grid based on the Borrower's Index Debt Rating or a grid based on the Company's Leverage Ratio.
The agreement includes customary affirmative and negative covenants, along with a financial covenant. This financial covenant is tested at the end of each fiscal quarter and requires that the Company not exceed a maximum Leverage Ratio of 3.50:1.00. The company may elect to operate at a ratio of 4.00:1.00 for a period of up to four quarters following certain material acquisition transactions.
