FACTSET RESEARCH SYSTEMS INCFDS
FACTSET RESEARCH SYSTEMS INC Debt Disclosure
DEBT
We elected not to carry our debt at fair value. The carrying value of our debt is net of related unamortized discounts and debt issuance costs. Our debt obligations as of August 31, 2024 and August 31, 2023 consisted of the following:
| (in thousands) | Issuance Date | Contractual Maturity Date | August 31, 2024 | August 31, 2023 | ||||||||||
| Current debt | ||||||||||||||
| 2022 Term Facility | 3/1/2022 | 3/1/2025 | $ | 125,000 | $ | — | ||||||||
| Total unamortized debt issuance costs on Current debt | (158) | — | ||||||||||||
| Total Current debt | $ | 124,842 | $ | — | ||||||||||
| Long-term debt | ||||||||||||||
| 2022 Term Facility | 3/1/2022 | 3/1/2025 | — | 375,000 | ||||||||||
| 2022 Revolving Facility | 3/1/2022 | 3/1/2027 | 250,000 | 250,000 | ||||||||||
| 2027 Notes | 3/1/2022 | 3/1/2027 | 500,000 | 500,000 | ||||||||||
| 2032 Notes | 3/1/2022 | 3/1/2032 | 500,000 | 500,000 | ||||||||||
| Total unamortized discounts and debt issuance costs | (8,869) | (12,300) | ||||||||||||
| Total Long-term debt | $ | 1,241,131 | $ | 1,612,700 | ||||||||||
Total debt | $ | 1,365,973 | $ | 1,612,700 | ||||||||||
As of August 31, 2024, annual maturities on our debt obligations, based on contractual maturity dates, were as follows:
(in thousands) | Maturities | ||||
| Fiscal Years Ended August 31, | |||||
| 2025 | $ | 125,000 | |||
| 2026 | — | ||||
| 2027 | 750,000 | ||||
| 2028 | — | ||||
| 2029 | — | ||||
| Thereafter | 500,000 | ||||
| Total | $ | 1,375,000 | |||
2022 Credit Agreement
On March 1, 2022, we entered into a credit agreement (the "2022 Credit Agreement") and borrowed an aggregate principal amount of $1.0 billion under its senior unsecured term loan credit facility (the "2022 Term Facility") and $250.0 million of the available $500.0 million under its senior unsecured revolving credit facility (the "2022 Revolving Facility" and, together with the 2022 Term Facility, the "2022 Credit Facilities"). The 2022 Term Facility matures on March 1, 2025, and the 2022 Revolving Facility matures on March 1, 2027. The 2022 Revolving Facility allows for the availability of up to $100.0 million in the form of letters of credit and up to $50.0 million in the form of swingline loans. We may seek additional commitments of up to $750.0 million under the 2022 Revolving Facility from lenders or other financial institutions.
We used these borrowings, along with the net proceeds from the issuance of the Senior Notes (as defined below) and cash on hand, to finance the consideration for the CGS acquisition, to repay prior outstanding borrowings and to pay related transaction fees, costs and expenses.
During fiscal 2022, we incurred approximately $9.5 million in debt issuance costs related to the 2022 Credit Facilities. Debt issuance costs are presented in the Consolidated Balance Sheets as a direct deduction from the carrying amount of the debt liability. Debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income on a straight-line basis over the contractual term of the debt, which approximates the effective interest method.
We may voluntarily prepay loans under the 2022 Credit Facilities at any time without premium or penalty. During fiscal 2024, we repaid $250.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $200.0 million. Since loan inception on March 1, 2022, we have repaid $875.0 million under the 2022 Term Facility, inclusive of voluntary prepayments of $762.5 million.
From the borrowing date through November 30, 2023, the outstanding borrowings under the 2022 Credit Facilities bore interest at a rate equal to the applicable one-month Term SOFR plus a 1.1% spread (comprised of a 1.0% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment). From December 1, 2023 through August 31, 2024, the spread decreased to 0.975% (comprised of a 0.875% interest rate margin based on a debt leverage pricing grid plus a 0.1% credit spread adjustment). Interest on the 2022 Credit Facilities is currently payable on the last business day of each month, in arrears.
Additionally, we pay a commitment fee on the daily unused amount of the 2022 Revolving Facility using a pricing grid based on our senior unsecured non-credit enhanced long-term debt rating and our total leverage ratio. From the borrowing date through November 30, 2023, the commitment fee was 0.125%, which subsequently decreased to 0.1% through August 31, 2024.
The 2022 Credit Agreement contains usual and customary event of default provisions for facilities of this type, which are subject to usual and customary grace periods and materiality thresholds. If an event of default occurs under the 2022 Credit Agreement, the lenders may, among other things, terminate their commitments and declare all outstanding borrowings immediately due and payable.
The 2022 Credit Agreement contains usual and customary affirmative and negative covenants for facilities of this type, including a financial covenant requiring maintenance of a total leverage ratio of no greater than 3.50 to 1.00 as of August 31, 2024. We were in compliance with all covenants and requirements of the 2022 Credit Agreement as of August 31, 2024.
Swap Agreements
2024 Swap Agreement
On March 1, 2024, we entered into the 2024 Swap Agreement to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 5.145%.
2022 Swap Agreement
On March 1, 2022, we entered into the 2022 Swap Agreement to hedge a portion of our outstanding floating SOFR debt with a fixed interest rate of 1.162%. Effective December 30, 2022, we apportioned the then-outstanding notional amount of the 2022 Swap Agreement between two counterparties. The 2022 Swap Agreement matured on February 28, 2024.
2020 Swap Agreement
On March 5, 2020, we entered into the 2020 Swap Agreement to hedge a portion of our then outstanding floating LIBOR rate debt with a fixed interest rate of 0.7995%. On March 1, 2022, we terminated the 2020 Swap Agreement and concurrently entered into the 2022 Swap Agreement.
Refer to Note 5, Derivative Instruments for further discussion of the 2024 Swap Agreement, 2022 Swap Agreement and 2020 Swap Agreement.
Senior Notes
On March 1, 2022, we completed a public offering of $500.0 million aggregate principal amount of 2.900% Senior Notes due March 1, 2027 (the "2027 Notes") and $500.0 million aggregate principal amount of 3.450% Senior Notes due March 1, 2032 (the "2032 Notes" and, together with the 2027 Notes, the "Senior Notes"). The Senior Notes were issued pursuant to an indenture, dated as of March 1, 2022, by and between us and U.S. Bank Trust Company, National Association, as trustee (the "Trustee"), as supplemented by the supplemental indenture, dated as of March 1, 2022, between us and the Trustee (the "Supplemental Indenture").
The Senior Notes were issued at an aggregate discount of $2.8 million and we incurred approximately $9.1 million in debt issuance costs. Debt discounts and debt issuance costs are presented in the Consolidated Balance Sheets as a net direct deduction from the carrying amount of the debt liability. The debt discounts and debt issuance costs are amortized to Interest expense in the Consolidated Statements of Income over the contractual term of the debt, leveraging the effective interest method.
Interest on the Senior Notes is payable semiannually in arrears on March 1 and September 1 of each year.
We may redeem the Senior Notes, in whole or in part, at any time at specified redemption prices, plus any accrued and unpaid interest. Upon the occurrence of a change of control triggering event (as defined in the Supplemental Indenture), we must offer to repurchase the Senior Notes at 101% of their principal amount, plus any accrued and unpaid interest.
2019 Credit Agreement
On March 29, 2019, we entered into a credit agreement with PNC Bank, National Association (the "2019 Credit Agreement") and borrowed $575.0 million of the available $750.0 million provided by the revolving credit facility thereunder (the "2019 Revolving Credit Facility"). Borrowings under the 2019 Revolving Credit Facility bore interest on the outstanding principal amount at a rate equal to the daily LIBOR plus a spread using a debt leverage pricing grid. Interest on the amounts outstanding under the 2019 Revolving Credit Facility was payable quarterly, in arrears, and on the maturity date. We incurred approximately $0.9 million in debt issuance costs related to the 2019 Credit Agreement.
On March 1, 2022, we repaid in full and terminated the 2019 Credit Agreement and amortized the remaining related $0.4 million of capitalized debt issuance costs into Interest expense in the Consolidated Statements of Income.
Interest Expense
The following table presents the interest expense on our outstanding debt which is a component of Interest expense in our Consolidated Statements of Income:
| Years Ended August 31, | |||||||||||
(in thousands) | 2024 | 2023 | 2022 | ||||||||
Interest expense on outstanding debt(1) | $ | 65,412 | $ | 66,283 | $ | 35,152 | |||||
(1) Interest expense on our outstanding debt includes the related amortization of debt issuance costs and debt discounts. Interest expense is net of the effects of our interest rate swap agreements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Oct 29, 2024 | Showing above |
| 2023 | Oct 27, 2023 | |
| 2022 | Oct 21, 2022 | |
| 2021 | Oct 22, 2021 | |
| 2020 | Oct 29, 2020 | |
| 2019 | Oct 30, 2019 | |
| 2018 | Oct 30, 2018 | |
| 2017 | Oct 30, 2017 | |
| 2016 | Oct 31, 2016 | |
| 2015 | Nov 2, 2015 | |
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.