Summary
Agilent Technologies, Inc. (A) announced on August 8, 2019, that on August 7, 2019, it entered into an amendment to its existing Credit Agreement, establishing a new $500 million, 364-day incremental term facility. This facility, which matures on August 5, 2020, will be used for general corporate purposes and working capital needs. The company has the option to borrow under this facility until August 30, 2019, but any repaid amounts cannot be re-borrowed.
Key Highlights
- 1Agilent Technologies entered into a $500 million incremental term loan facility on August 7, 2019.
- 2The new facility has a 364-day term, maturing on August 5, 2020.
- 3Proceeds are designated for working capital and general corporate purposes.
- 4The company has an option to borrow under this facility until August 30, 2019.
- 5Repaid amounts under this facility are not eligible for re-borrowing.
- 6Interest rates are variable, based on either an alternate base rate or LIBOR, plus a margin tied to Agilent's credit ratings.
- 7At current credit ratings, the applicable margin for alternate base rate loans is 0.000% and for LIBOR loans is 0.750%.
Frequently Asked Questions
The $500 million incremental term facility is intended to provide Agilent Technologies with additional flexibility for working capital and general corporate purposes. The company is not currently borrowing under it but has the option to do so before August 30, 2019.
The facility is a 364-day term loan, maturing on August 5, 2020. It is non-amortizing, meaning the principal is due at maturity. Interest rates are based on either the alternate base rate or LIBOR, plus a margin that varies with Agilent's credit rating.
The filing indicates that Agilent is not currently borrowing under the facility. While it provides a borrowing capacity of $500 million, the actual impact on debt will depend on whether and when Agilent chooses to draw funds, and for what duration. The short-term nature (364 days) suggests it might be for short-term liquidity needs rather than long-term capital investment.
The interest rate is determined by Agilent's choice between an alternate base rate or a London Interbank Offered Rate (LIBOR) based rate. These rates are subject to an 'applicable margin' which depends on the company's senior debt credit ratings. Currently, for alternate base rate loans, the margin is 0.000%, and for LIBOR loans, it is 0.750%. The specific rates will fluctuate based on market conditions and Agilent's creditworthiness.