Summary
Arthur J. Gallagher & Co. (AJG) filed an 8-K on July 15, 2010, to report the entry into a new, unsecured multicurrency credit agreement. This new agreement, effective July 15, 2010, replaces the company's previous $450 million revolving credit facility which was set to expire in October 2010. The new facility offers a larger commitment of up to $500 million, with the potential to increase to $600 million, and extends the maturity date to July 14, 2014. This refinancing demonstrates AJG's proactive approach to managing its capital structure and extends its borrowing capacity with more favorable terms. Notably, the previous facility was fully paid off without early termination penalties, and the outstanding letters of credit were transferred to the new agreement. The new credit agreement includes covenants related to net worth and financial leverage, standard for such arrangements.
Key Highlights
- 1Arthur J. Gallagher & Co. entered into a new $500 million unsecured multicurrency credit agreement on July 15, 2010.
- 2The new credit facility has a maturity date of July 14, 2014, extending the company's borrowing availability.
- 3The new agreement replaces a previous $450 million revolving credit facility that was set to expire on October 4, 2010.
- 4The company has the option to increase the revolving credit commitment under the new agreement up to a maximum of $600 million.
- 5No borrowings were outstanding under the new agreement as of July 15, 2010.
- 6The previous credit agreement was terminated without incurring early termination penalties, with outstanding letters of credit transferred to the new agreement.
- 7The new credit agreement includes covenants related to net worth and financial leverage ratios, with interest rates and facility fees dependent on the company's financial leverage.