Summary
Ameriprise Financial, Inc. (AMP) filed an 8-K on October 1, 2010, to report the entry into a new material definitive agreement: a credit facility that replaces their previous one which expired on the same date. This new agreement establishes an unsecured revolving credit facility with an initial aggregate principal commitment of up to $500 million, with the potential to increase to $750 million under certain conditions. The facility will be used for general corporate purposes, including working capital. This new credit facility provides Ameriprise with continued access to funding and demonstrates the company's ability to secure financing. The terms indicate interest rates tied to market rates and the company's senior unsecured long-term debt rating, along with a facility fee on committed amounts. Key financial covenants include maintaining a consolidated net worth of at least $6.891 billion and a consolidated leverage ratio not exceeding 40%. The facility is set to expire on September 29, 2011, with an option to convert outstanding loans into a term loan.
Key Highlights
- 1Entry into a new unsecured revolving credit facility with a commitment of up to $500 million, potentially expandable to $750 million.
- 2The new facility replaces a previous credit facility that expired on September 30, 2010.
- 3Funds from the credit facility can be used for working capital and general corporate purposes.
- 4Interest rates are variable, based on market rates plus an applicable margin tied to Ameriprise's senior unsecured long-term debt rating.
- 5Key financial covenants include a minimum consolidated net worth of $6.891 billion and a maximum consolidated leverage ratio of 40%.
- 6The credit facility has an expiration date of September 29, 2011, with an option for conversion to a term loan.