01—Abstract
Summary
Summary of the 8-K filed June 13, 2023. Cited figures are marked; the original filing is the authoritative source.
Agilent Technologies, Inc. (Agilent) has entered into a new $1.5 billiona five-year unsecured credit facility, maturing on June 7, 2028.
This facility replaces a previous credit agreement and provides Agilent with significant financial flexibility for general corporate purposes. The company has the option to increase the facility size by up to an additional $750 millionb, subject to lender commitments and customary conditions, and can also extend the maturity date by one year. The new credit facility offers competitive interest rates based on Agilent's senior debt credit ratings.
At its current ratings, the applicable margin for alternate base rate loans is 0.000%, and for Term Rate or SONIA rate loans, it is 0.910%. Additionally, Agilent will pay a quarterly facility fee of 0.090% on the total commitments, amounting to approximately $1.35 millionc annually at current ratings. The agreement includes standard covenants and financial covenants, such as a maximum ratio of adjusted consolidated financial indebtedness to consolidated capitalization of 0.65 to 1.00.
02—Key points
Key Highlights
- Agilent Technologies entered into a new $1.5 billion, five-year unsecured credit facility maturing on June 7, 2028.
- The facility replaces a prior credit agreement, enhancing financial flexibility for general corporate purposes.
- Option to increase the facility by up to $750 million and extend maturity by one year, subject to certain conditions.
- Interest rates are variable, linked to the company's credit ratings, with a 0.000% margin for alternate base rate loans and 0.910% for Term Rate/SONIA loans at current ratings.
- Annual facility fee of 0.090% on commitments (approx. $1.35 million at current ratings) will be paid.
- Includes customary affirmative and negative covenants, with a key financial covenant limiting adjusted debt to capitalization ratio to 0.65:1.00.
03—Questions
Frequently Asked Questions
What is the total size of the new credit facility and when does it mature?
The new unsecured credit facility has a total size of $1.5 billion and matures on June 7, 2028, providing a five-year term.
Can Agilent increase the borrowing capacity under this new facility?
Yes, Agilent has the option to increase commitments under the facility or create new incremental term loan facilities up to an aggregate of $750 million, subject to obtaining commitments from lenders and satisfying certain conditions.
What are the interest rate terms and associated fees?
Interest rates are based on either an alternate base rate or a Term Rate/Daily Simple SONIA rate, plus an applicable margin determined by Agilent's credit rating. At current ratings, the margin is 0.000% for alternate base rate loans and 0.910% for Term Rate/SONIA loans. Agilent will also pay a quarterly facility fee of 0.090% on the commitments and letter of credit participation fees.
What are the key financial covenants in the new credit agreement?
A primary financial covenant requires Agilent's ratio of adjusted consolidated financial indebtedness to consolidated capitalization to not exceed 0.65 to 1.00 at the end of any fiscal quarter. The agreement also includes customary limitations on liens, indebtedness of subsidiaries, and sale-leaseback transactions.
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