Summary
The Boeing Company (BA) has filed an 8-K report detailing the entry into a new $2.376 billion, 364-day revolving credit agreement, effective November 12, 2010. This facility replaces a previous $1.525 billion agreement from the prior year, significantly increasing Boeing's available credit line. The new agreement, led by Citigroup and J.P. Morgan, provides Boeing with enhanced financial flexibility and liquidity, crucial for managing its operations and potential future investments or acquisitions. Key terms include a commitment fee on unused portions and interest rates tied to base rates or Eurodollar rates, with margins influenced by Boeing's credit default swap spread. The agreement also contains standard covenants restricting the company's ability to incur liens, merge, or exceed a 60% consolidated debt-to-capital ratio. This proactive step in securing a larger credit facility suggests a strategic move by Boeing to bolster its financial position and ensure robust access to capital.
Key Highlights
- 1Boeing entered into a new $2.376 billion, 364-day revolving credit agreement on November 12, 2010.
- 2This new credit facility significantly increases Boeing's available borrowing capacity, up from $1.525 billion previously.
- 3The agreement replaces a credit facility that was set to mature in November 2010.
- 4Citigroup Global Markets Inc. and J.P. Morgan Securities LLC served as joint lead arrangers and joint book managers.
- 5The credit agreement includes customary covenants related to liens, mergers, and a debt-to-capital ratio limit of 60%.
- 6Events of default include non-payment, breaches of representations, failure to perform covenants, cross-defaults, ERISA liabilities, and insolvency events.
- 7Several lenders and their affiliates have pre-existing financial relationships with Boeing, providing various financial services.