Summary
The Boeing Company (BA) has filed an 8-K report detailing the entry into a new $1.525 billion, 364-day revolving credit agreement, effective November 13, 2009. This new facility significantly increases their available short-term liquidity from the previous $1.0 billion agreement. This increased credit line provides Boeing with enhanced financial flexibility and a stronger buffer to manage its operations and potential short-term funding needs. The agreement includes customary covenants and events of default, with restrictions on incurring liens, merging, and a debt-to-capitalization ratio limit. The terms reflect standard practices for corporate credit facilities and indicate Boeing's proactive approach to maintaining robust liquidity.
Key Highlights
- 1Boeing entered into a new $1.525 billion, 364-day revolving credit agreement, replacing a $1.0 billion facility.
- 2The new credit agreement provides increased short-term borrowing capacity and financial flexibility.
- 3The agreement is with a syndicate of lenders, arranged by Citigroup Global Markets Inc. and J.P. Morgan Securities Inc.
- 4Interest rates are based on a 'base rate' or Eurodollar rates, with an 'applicable margin' tied to Boeing's credit default swap spread.
- 5Customary covenants are in place, including restrictions on liens, mergers, and a maximum consolidated debt to total capital ratio of 60%.
- 6Standard events of default are outlined, such as non-payment, breach of representations, failure to perform covenants, cross-defaults, ERISA obligations, and bankruptcy.
- 7Affiliates of some lenders provide various financial services to Boeing, indicating ongoing business relationships.