Summary
Ameriprise Financial, Inc. (AMP) has entered into a material definitive agreement by amending and restating its credit facility. This updated agreement, effective October 12, 2017, establishes an unsecured revolving credit facility with an initial aggregate principal commitment of up to $750 million, with an option to increase it to $1 billion under certain conditions. The facility is set to expire on October 12, 2022, and proceeds can be used for general corporate purposes, including working capital. Key terms of the Restated Credit Agreement include interest rates tied to market rates plus an applicable margin that varies with AMP's senior unsecured long-term debt rating, and a quarterly facility fee on commitments. The agreement incorporates standard covenants, including restrictions on liens, fundamental business changes, affiliate transactions, and subsidiary indebtedness. Crucially, it mandates maintaining an interest coverage ratio above 4.00:1.00 and limits the consolidated leverage ratio to 40%. This refinancing provides Ameriprise with flexible access to capital and demonstrates ongoing financial stewardship.
Key Highlights
- 1Ameriprise Financial entered into a Third Amended and Restated Credit Agreement on October 12, 2017, replacing a previous agreement from May 1, 2015.
- 2The new agreement provides an unsecured revolving credit facility with a committed amount of up to $750 million, which can be increased to $1 billion under specified conditions.
- 3The credit facility has an expiration date of October 12, 2022.
- 4Funds from the credit facility can be used for working capital and other general corporate purposes.
- 5Interest rates are variable, based on a market rate plus an applicable margin tied to the Company's senior unsecured long-term debt rating.
- 6Financial covenants include maintaining an interest coverage ratio above 4.00:1.00 and a consolidated leverage ratio not exceeding 40%.
- 7The agreement includes standard affirmative and negative operational and financial covenants customary for such facilities.