Korn Ferry enters $850 million credit agreement with Wells Fargo and lenders

Korn Ferry (NYSE:KFY), currently valued at $3.84 billion in market capitalization, announced Tuesday that it has entered into a new credit agreement with Wells Fargo (NYSE:WFC) Bank, National Association, as administrative agent, and a group of other lenders. The agreement provides Korn Ferry with a five-year senior secured revolving credit facility totaling $850 million. According to InvestingPro data, the company maintains a strong financial position, with more cash than debt on its balance sheet and liquid assets exceeding short-term obligations.

According to the company’s statement in a Securities and Exchange Commission filing, the agreement allows for the possibility of additional term loans or an increase in the total revolving commitments by up to $600 million, plus an unlimited amount subject to a secured net leverage ratio of 3.25 to 1.00. The obligations under the new facility are secured by substantially all assets of Korn Ferry and its subsidiary guarantors.

Borrowings under the credit agreement will bear interest at rates tied to either Term SOFR plus a margin between 1.125% and 2.00% per annum, or a base rate plus a margin between 0.125% and 1.00% per annum. The applicable margin depends on Korn Ferry’s consolidated net leverage ratio.

The agreement includes covenants that restrict the company’s ability to incur additional debt, grant liens, and make certain acquisitions, investments, asset sales, and restricted payments. Korn Ferry is also required to maintain a secured net leverage ratio not greater than 3.75 to 1.00. The credit agreement contains customary events of default and provides lenders with rights and remedies such as accelerating loans, terminating commitments, and accessing collateral if defaults occur.

In connection with entering into the new agreement, Korn Ferry repaid all outstanding obligations under its previous credit agreement dated December 16, 2019, which was administered by Bank of America, N.A.

The financial institutions involved in the new facility, and their affiliates, provide a range of financial services and some participated in Korn Ferry’s prior credit agreement.

This summary is based on a statement from Korn Ferry’s recent SEC filing.

In other recent news, Korn Ferry reported strong fiscal fourth-quarter results for 2025, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $1.32, exceeding the forecast of $1.26, and reported revenue of $712 million, which was above the anticipated $690.07 million. This performance reflects a 4% year-over-year increase in consolidated fee revenue at constant currency and an 8% rise in adjusted EBITDA. The company also returned $173 million to shareholders through buybacks and dividends, showcasing its commitment to shareholder value.

Truist Securities responded to these results by raising Korn Ferry’s stock price target from $80.00 to $88.00, maintaining a Buy rating. The firm highlighted Korn Ferry’s resilience amid tariff uncertainties and noted that the company’s guidance for the first quarter of fiscal 2026 aligns with or slightly exceeds consensus estimates. Korn Ferry’s strategic focus on technology, AI, and organizational performance solutions was noted as a key growth driver.

The company’s outlook for the first quarter of fiscal 2026 includes expected fee revenue between $675 million and $695 million, with an adjusted EBITDA margin ranging from 16.8% to 17.2%. Korn Ferry anticipates an adjusted diluted EPS of $1.18 to $1.26. Truist Securities identified Korn Ferry as its preferred investment in the Human Capital sector, citing the company’s strong quarterly results and guidance.

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