8-KMaterial AgreementsFinancial EventsOther Events+1

AGILENT TECHNOLOGIES, INC. 8-K Report, Material Agreement (Jul 19, 2010)

Filed July 19, 2010For Securities:A

Summary

Agilent Technologies, Inc. (A) filed an 8-K on July 19, 2010, primarily to disclose its entry into interest rate swaps and to incorporate by reference information related to a financial obligation. The company entered into interest rate swaps totaling $500 million on July 13, 2010. These swaps effectively convert the fixed-rate interest expense on its 5.00% Senior Notes due 2020 into a variable interest rate based on three-month LIBOR plus 174 basis points.

Key Highlights

  • 1Agilent Technologies entered into interest rate swaps with a notional amount of $500 million.
  • 2The interest rate swaps are designed to hedge the company's exposure to interest rate fluctuations on its 5.00% Senior Notes due 2020.
  • 3The economic effect of the swaps is to transform fixed-rate debt into variable-rate debt, paying three-month LIBOR plus 174 basis points.
  • 4The filing also incorporates by reference information regarding the creation of a direct financial obligation, likely related to the issuance or terms of the notes.
  • 5Key exhibits include the underwriting agreement for the notes and supplemental indentures related to the 2013 and 2020 Senior Notes.

Frequently Asked Questions

The primary purpose of the interest rate swaps is to convert the fixed-rate interest payments on its $500 million of 5.00% Senior Notes due 2020 into variable-rate payments tied to three-month LIBOR plus 174 basis points. This action aims to manage the company's exposure to potential increases in fixed interest rates.

The total notional amount of the interest rate swaps entered into by Agilent Technologies is $500 million.

The swaps will change Agilent's interest payments on the 2020 Notes from a fixed 5.00% to a variable rate that fluctuates with three-month LIBOR plus a spread of 174 basis points. This means their interest expense will increase if LIBOR rises and decrease if LIBOR falls.

Beyond the interest rate swaps, the filing incorporates by reference information pertaining to the creation of a direct financial obligation, which likely relates to the terms and conditions of the company's debt instruments, including the 2013 and 2020 Senior Notes.