Workday Swaps Its $1 Billion Credit Line For A $1.5 Billion Facility, With Wells Fargo Now In The Lead
An 8-K filed Thursday shows the enterprise software company replaced a four-year-old Bank of America-led arrangement with a larger, five-year revolving line.
Workday replaced its existing revolving credit facility with a $1.5 billion arrangement on Thursday, lifting its available liquidity by 50% and handing the lead banking role to Wells Fargo — a shift from the Bank of America-led structure the company had carried since 2022.
What The 8-K Says
The new credit agreement, signed October 1, 2026, gives Workday a five-year revolving facility that matures on October 1, 2031, according to the 8-K filed with the SEC. Wells Fargo Bank serves as administrative agent, swing line lender, and a letter-of-credit issuer. Bank of America, Barclays Bank, and Morgan Stanley Senior Funding are syndication agents on the deal.
The facility it replaces dated to April 6, 2022, when Workday arranged a $1 billion revolving line with Bank of America as administrative agent. The new deal raises that ceiling by $500 million and shifts the lead relationship.
As of Thursday, Workday had drawn nothing against the new line. The company may prepay borrowings and permanently reduce commitments at any time without penalty or premium — a standard feature that keeps the facility flexible as a backstop rather than a funding source.
The Rate Structure And Currency Provisions
Interest on borrowings will be set, at Workday's election, at either a base rate or the secured overnight financing rate (SOFR). Under the leverage-based pricing grid, SOFR loans carry a margin of 0.875% to 1.500% depending on Workday's consolidated leverage ratio. Alternatively, Workday may elect a debt-rating-based pricing grid, under which the SOFR margin runs from 0.750% to 1.250% depending on ratings from Moody's or S&P. The commitment fee on unused amounts ranges from 0.080% to 0.200% per year under the leverage grid, or 0.070% to 0.150% under the ratings grid.
Loans can be denominated in U.S. dollars, euros, sterling, or Canadian dollars. Non-dollar borrowings are capped at $525 million in aggregate — a provision that reflects Workday's international business footprint. Base-rate loans, by contrast, are available only to domestic borrowers and must be denominated in U.S. dollars.
The Covenant That Matters Most
The agreement contains one financial covenant: Workday must not exceed a maximum leverage ratio of 3.50 to 1.00, tested quarterly. That ceiling can step up to 4.50 to 1.00 at Workday's election for a defined period following what the agreement calls a "Qualified Acquisition" — giving the company room to carry more debt temporarily after a large deal without tripping the covenant.
Standard negative covenants restrict the incurrence of additional liens and indebtedness and limit certain merger transactions. A payment default triggers a 2.0 percentage point increase in the applicable interest rate. Other events of default include non-payment of fees, covenant violations, cross-defaults to other debt, bankruptcy, material judgments, change of control, and certain pension-related events.
Workday may also request, up to two times over the life of the agreement, that lenders extend the maturity date by one year — giving the company a potential runway to October 2033 if both extensions are exercised.
What It Changes
The mechanics are straightforward: Workday now has $500 million more in undrawn, immediately available liquidity than it did under the prior facility, with a maturity five years out rather than the remaining term on the 2022 line.
The lead banking relationship has moved from Bank of America to Wells Fargo, though Bank of America remains in the syndicate as a co-agent alongside Barclays and Morgan Stanley. Wells Fargo Securities, BofA Securities, Barclays, and Morgan Stanley Senior Funding served as joint lead arrangers and bookrunners on the new deal.
WDAY shares slipped about 0.13% to $186.50 in Thursday after-hours trading following the disclosure, an early and indicative move ahead of any broader market reaction. The stock had closed Thursday's regular session down about 1.95% at $186.75 (market data).
The 8-K was signed by Richard H. Sauer, Workday's Chief Legal Officer, Head of Corporate Affairs, and Corporate Secretary.
The next concrete test of the facility's terms comes at Workday's next quarterly earnings report, when the leverage ratio covenant will be measured for the first time under the new agreement.
Sources
- 8-K Filing — Workday, Inc. (WDAY) — SEC EDGAR
