Super Micro Computer, Inc. 8-K

What Happened

• Super Micro Computer, Inc. announced it entered into a Credit Agreement dated December 29, 2025, providing a revolving credit facility with an initial aggregate principal amount of up to $2.0 billion, with JPMorgan Chase Bank, N.A. as administrative and collateral agent. The facility matures on December 29, 2030 and may be increased by up to $1.0 billion subject to conditions. Net proceeds may be used for working capital and general corporate purposes.

Key Details

• Revolving Credit Facility: $2.0 billion initial capacity; optional increase up to $1.0 billion.
• Sublimits: $200 million letter‑of‑credit sub‑limit; $150 million same‑day borrowing sub‑limit.
• Credit support: During "Non‑IG Periods" the Company and qualifying domestic subsidiaries will guarantee borrowings and grant first‑priority security interests in substantially all assets; those guarantees and liens drop away on or after Sept 30, 2026 if the company achieves investment‑grade ratings from at least two of three agencies (Moody’s ≥ Baa3, S&P ≥ BBB‑, Fitch ≥ BBB‑) with stable or better outlook, and are reinstated if ratings fall below those levels.
• Pricing & fees: Interest = alternate base rate or term rate + margin. Margin ranges (Non‑IG): 1.25%–2.00% (or 0.25%–1.00% for alternate base rate loans); (IG): 1.125%–1.375% (or 0.125%–0.375% for alternate base rate). Commitment fee on unused commitments: Non‑IG 0.15%–0.30% p.a.; IG 0.12%–0.15% p.a., payable quarterly.
• Covenants & leverage: Usual restrictive covenants, with leverage ratio caps that step down over time: 4.00x (quarters 1–4 after Dec 29, 2025), 3.50x (quarters 5–8), thereafter 3.00x.
• Default provisions: Customary events of default (including change of control) permit lender acceleration; overdue amounts bear an additional 2.00% per annum on top of the applicable rate in certain defaults.

Why It Matters

• This facility gives Super Micro significant liquidity flexibility ($2.0B, expandable) for working capital and general corporate needs while tying certain subsidiary guarantees and asset pledges to the company’s credit rating. The rating‑based release of guarantees and step‑down leverage requirements create clear finance milestones that can affect the company’s collateral position and borrowing costs. Investors should note the maturity (Dec 29, 2030), the potential reinstatement of guarantees if ratings fall, and the leverage covenants that tighten over time.