Item 1.01 Entry into a Material Definitive Agreement.
On May 27, 2020 (the "Amendment Effective Date"), FedEx Corporation ("FedEx"),
as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders
under each of the $2.0 billion five-year credit agreement and the $1.5 billion
364-day credit agreement, each dated as of March 17, 2020, among FedEx, JPMorgan
Chase Bank, N.A., as administrative agent, and the lenders and other parties
thereto (the "Credit Agreements"), entered into amendments to the Credit
Agreements (the "Amendments"). The Amendments further enhance FedEx's liquidity
and financial flexibility during the ongoing COVID-19 pandemic.
The Amendments (i) modify the definition of "Consolidated EBITDA" used in the
leverage ratio required to be maintained by FedEx at the end of each fiscal
quarter pursuant to the Credit Agreements to exclude non-cash pension service
costs and (ii) increase the leverage ratio as follows: 3.75:1.0 at May 31, 2020;
4.75:1.0 at August 31, 2020; 4.9:1.0 at November 30, 2020; 4.75:1.0 at
February 28, 2021; and 3.75:1.0 at May 31, 2021, with the leverage ratio
reverting to 3.5:1.0 at August 31, 2021 and thereafter.
Additionally, during the period beginning on the Amendment Effective Date and
ending on May 31, 2021, the Amendments (i) restrict FedEx from repurchasing any
shares of its common stock or increasing the amount of its quarterly dividend
payable per share of common stock from $0.65 per share and (ii) increase the
commitment fees on the average daily undrawn amount under the Credit Agreements.
Certain of the lenders under the Credit Agreements, as well as certain of their
affiliates, engage in transactions with, and perform services for, FedEx and its
affiliates in the ordinary course of business and have engaged, and may in the
future engage, in other commercial banking transactions and investment banking,
financial advisory and other financial services transactions with FedEx and its
affiliates.
The Amendments will be filed as exhibits to FedEx's annual report
on Form 10-K for the fiscal year ending May 31, 2020.
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