Summary
Air Products & Chemicals, Inc. (APD) announced on March 31, 2021, the execution of a new five-year revolving credit agreement totaling $2.5 billion. This new agreement, referred to as the 2021 Credit Agreement, replaces their previous $2.3 billion facility and is designed to provide substantial liquidity and support for the company's commercial paper program. The agreement is unsecured and available to both the parent company and its subsidiaries, with APD providing unconditional guarantees for subsidiary borrowings. This move reflects a proactive approach to maintaining financial flexibility and robust funding capabilities.
Key Highlights
- 1Entered into a new five-year, $2.5 billion revolving credit agreement (2021 Credit Agreement).
- 2The new credit facility increases overall borrowing capacity by $200 million compared to the prior agreement.
- 3The agreement is a source of liquidity and supports the company's commercial paper program.
- 4The 2021 Credit Agreement replaces a prior $2.3 billion revolving credit agreement.
- 5No borrowings were outstanding under the prior agreement at the time of termination, and no penalties were incurred.
- 6The credit facility is senior unsecured debt available to the company and its subsidiaries.
- 7The primary financial covenant is a maximum ratio of total debt to capitalization.
Frequently Asked Questions
The new $2.5 billion revolving credit agreement primarily serves as a source of liquidity for Air Products & Chemicals, Inc. and is intended to support its commercial paper program, ensuring financial flexibility for its operations and potential future needs.
The new 2021 Credit Agreement increases the total borrowing capacity to $2.5 billion from the previous $2.3 billion under the Prior Agreement. It also has a new five-year term and replaces the prior facility.
The agreement is for senior unsecured debt. The primary financial covenant stipulated is a maximum ratio of total debt to capitalization. The company also unconditionally guarantees payments for any loans made to its subsidiaries under this agreement.
No, Air Products incurred no early termination penalties, as no borrowings were outstanding under the Prior Agreement at the time of its termination.