8-KMaterial AgreementsFinancial EventsExhibits & Filings

BOEING CO 8-K Report, Material Agreement (Nov 3, 2017)

Filed November 3, 2017For Securities:BABA-PA

Summary

Boeing Co. (BA) has entered into a new $2.5 billion, 364-day revolving credit agreement, replacing its previous facility that expired on November 1, 2017. This new agreement provides Boeing with short-term liquidity and is set to mature on October 31, 2018, with options for extension. The terms include a commitment fee and defined interest rates based on base or Eurodollar rates, along with customary covenants restricting debt levels and mergers, and standard events of default. In addition to the new short-term facility, Boeing also amended its existing five-year revolving credit agreement. This amendment, specifically Amendment No. 4, extends the maturity date of the five-year agreement to November 1, 2022, for the majority of its approximately $2.47 billion commitment. These actions indicate Boeing's proactive approach to managing its credit facilities and ensuring financial flexibility.

Key Highlights

  • 1Boeing entered into a new $2.5 billion, 364-day revolving credit agreement, effective November 1, 2017.
  • 2The new credit facility replaces a prior 364-day agreement expiring on the same date.
  • 3The agreement matures on October 31, 2018, with provisions for extension and conversion to term loans.
  • 4Key terms include a 0.04% annual commitment fee and defined interest rates tied to base or Eurodollar rates.
  • 5Customary covenants restrict consolidated debt to 60% of total capital and limit mergers/consolidations.
  • 6Events of default are defined, including payment failures, incorrect representations, cross-defaults, ERISA liabilities, and insolvency.
  • 7Boeing also amended its five-year credit agreement, extending its maturity to November 1, 2022, for approximately $2.47 billion.

Frequently Asked Questions

Boeing entered into the new $2.5 billion, 364-day revolving credit agreement to replace its previous credit facility which was set to expire on November 1, 2017. This ensures continued access to short-term financing and maintains financial flexibility.

The new agreement is for $2.5 billion with a 364-day term. It involves a 0.04% annual commitment fee. Borrowings will bear interest at floating rates, either tied to a base rate plus a margin or an ICE benchmark settlement rate plus a margin, depending on the type of borrowing.

The agreement includes covenants that restrict Boeing's consolidated debt to a maximum of 60% of its total capital and limit its ability to incur liens or merge with other entities. Events of default are standard and include failure to pay, material misrepresentations, breaches of other agreements (with a cure period), cross-default provisions with other debt, certain ERISA liabilities, and bankruptcy or insolvency.

The amendment to the five-year credit agreement, effective November 1, 2017, extends its maturity date to November 1, 2022, for the majority of its commitments (approximately $2.47 billion). This provides longer-term certainty regarding a significant portion of Boeing's credit availability, complementing the new short-term facility.