COGNIZANT TECHNOLOGY SOLUTIONS CORPCTSH

COGNIZANT TECHNOLOGY SOLUTIONS CORP Debt Disclosure

10-KFiled Feb 12, 20262 min read
We have a Credit Agreement providing for a $650 million Term Loan and a $1,850 million unsecured revolving credit facility, which are each due to mature in October 2027. We are required under the Credit Agreement to make scheduled quarterly principal payments on the Term Loan. During the third quarter of 2024, we borrowed $600 million under our revolving credit facility to partially fund the acquisition of Belcan. We repaid $300 million during the fourth quarter of 2024 and the remaining $300 million during the first quarter of 2025.
The Credit Agreement requires interest to be paid, at our option, at either the Term Benchmark, Adjusted Daily Simple RFR or the ABR Rate (each as defined in the Credit Agreement), plus, in each case, an Applicable Margin (as defined in the Credit Agreement). Initially, the Applicable Margin is 0.875% with respect to Term Benchmark loans and RFR loans and 0.00% with respect to ABR loans. Subsequently, the Applicable Margin with respect to Term Benchmark loans and RFR loans will be determined quarterly and may range from 0.75% to 1.125%, depending on our public debt ratings or, if we have not received public debt ratings, from 0.875% to 1.125%, depending on our Leverage Ratio, which is the ratio of indebtedness for borrowed money to Consolidated EBITDA, as defined in the Credit Agreement. Since the issuance of the Term Loan, the Term Loan has been a Term Benchmark loan. The Credit Agreement contains customary affirmative and negative covenants as well as a financial covenant. The financial covenant is tested at the end of each fiscal quarter and requires us to maintain a Leverage Ratio not in excess of 3.50:1.00, or for a period of up to four quarters following certain material acquisitions, 3.75:1.00. We were in compliance with all debt covenants and representations of the Credit Agreement as of December 31, 2025.
Short-term Debt
As of each of December 31, 2025 and 2024, we had $33 million of short-term debt related to current maturities of our Term Loan, with a weighted average interest rate of 4.7% and 5.3%, respectively.
Long-term Debt
The following table summarizes the long-term debt balances as of December 31:
(in millions)20252024
Notes outstanding under revolving credit facility
$— $300 
Term Loan
577 610 
Less:
Current maturities - Term Loan
(33)(33)
Unamortized deferred financing costs(1)(2)
Long-term debt, net of current maturities$543 $875 
The carrying value of our debt approximated its fair value as of each of December 31, 2025 and 2024.
The following represents the schedule of maturities of our Term Loan:
YearAmounts (in millions)
2026$33 
2027544 
Total$577 
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Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2024Feb 12, 2025
2023Feb 14, 2024
2022Feb 15, 2023
2021Feb 16, 2022
2020Feb 12, 2021
2019Feb 14, 2020
2018Feb 19, 2019
2017Feb 27, 2018
2016Mar 1, 2017
2015Feb 25, 2016

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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