Summary
Ameriprise Financial, Inc. (AMP) filed an 8-K on November 23, 2011, announcing the entry into a new $500 million unsecured revolving credit facility, with an option to increase it to $750 million. This new facility, effective November 22, 2011, replaces a previous credit facility that was terminated concurrently. The new credit agreement provides flexibility for working capital and general corporate purposes, including revolving loans, swing line loans, bid loans, and letters of credit. The interest rate on borrowings under the new facility will be based on a market rate plus an applicable margin tied to Ameriprise's senior unsecured long-term debt rating. The agreement includes customary covenants, such as maintaining a consolidated net worth of at least $6.886 billion (with adjustments) and keeping the consolidated leverage ratio below 40%. The facility expires on November 22, 2015. This action signifies a refinancing of its credit lines, likely aimed at optimizing its capital structure and ensuring liquidity.
Key Highlights
- 1Entry into a new $500 million unsecured revolving credit facility with an option to increase to $750 million.
- 2The new credit facility has a maturity date of November 22, 2015.
- 3The facility can be used for working capital and general corporate purposes, including loans and letters of credit.
- 4Interest rates are variable, based on a market rate plus an applicable margin tied to the company's debt rating.
- 5The agreement includes financial covenants requiring a minimum consolidated net worth and a maximum consolidated leverage ratio.
- 6Concurrent termination of the previous credit facility, originally set to expire November 30, 2011.
- 7The new credit facility is unsecured.