What is the total amount of credit available to Boeing under these new agreements?

The total available credit under the new agreements is $3.0 billion, comprised of a $1.0 billion 364-day revolving credit facility and a $2.0 billion five-year revolving credit facility.

How do the interest rates on these credit facilities work?

Interest rates are based on the 'base rate' (the higher of Citibank's publicly announced base rate or the Federal Funds Rate plus 0.50%) plus an applicable margin. Both the margin and commitment fees vary based on Boeing's credit rating and utilization levels.

What are the main restrictions or covenants associated with these credit agreements?

Key covenants restrict Boeing's ability to incur liens, merge or consolidate with other entities, and maintain consolidated debt below 60% of its total capital while the agreements are active and amounts are outstanding.

Why did Boeing enter into these new credit agreements?

These agreements likely aim to ensure continued financial flexibility, replace expiring credit lines, and provide access to substantial liquidity for operational needs, investments, or other corporate purposes. The establishment of a five-year agreement indicates a commitment to longer-term financial planning.

BA/BA-PA 8-K: Material Agreements & Financial Events

Summary

Boeing Company (BA) filed an 8-K on November 21, 2006, reporting the entry into two new material definitive agreements: a $1.0 billion, 364-day revolving credit agreement and a $2.0 billion, five-year revolving credit agreement. These new agreements replace prior credit facilities and provide Boeing with significant liquidity options. The terms include commitment fees and interest rates that vary based on Boeing's credit rating and prevailing market rates, with standard covenants restricting liens, mergers, and maintaining a debt-to-total capital ratio not exceeding 60% while the agreements are in effect. These credit agreements demonstrate Boeing's proactive approach to managing its financial flexibility and ensuring access to capital. The establishment of these facilities, particularly the longer-term five-year agreement, suggests confidence in the company's ongoing financial stability and its ability to meet future obligations. Investors should note the total available credit of $3.0 billion, which can support operational needs, strategic investments, or capital expenditures.

Key Highlights

1Entered into a new $1.0 billion, 364-day revolving credit agreement.
2Entered into a new $2.0 billion, five-year revolving credit agreement.
3These new agreements replace prior credit facilities.
4Interest rates and commitment fees are variable and depend on Boeing's credit rating.
5Covenants include restrictions on liens, mergers, and a maximum consolidated debt to total capital ratio of 60%.
6The agreements provide Boeing with significant financial flexibility and access to capital.

BOEING CO 8-K Report, Material Agreement (Nov 22, 2006)

Summary

Key Highlights

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