8-KMaterial AgreementsFinancial EventsOther Events+1

BECTON DICKINSON & CO 8-K Report, Material Agreement (May 24, 2012)

Filed May 24, 2012For Securities:BDX

Summary

Becton, Dickinson and Company (BD) announced on May 18, 2012, the entry into a new Five Year Credit Agreement, establishing a $1 billion senior unsecured revolving credit facility that matures in May 2017. This new facility replaces a prior agreement and offers flexibility, allowing BD to potentially access an additional $500 million, bringing the total possible financing to $1.5 billion. The funds are intended for general corporate purposes. Additionally, the filing notes a significant leadership change: Vincent A. Forlenza, currently CEO and President, will assume the additional role of Chairman of the Board effective July 1, 2012. This succession in leadership, coupled with the strengthened credit facility, provides insight into BD's financial and governance strategies.

Key Highlights

  • 1BD entered into a new Five Year Credit Agreement on May 18, 2012.
  • 2The new credit facility is a senior unsecured revolving facility totaling $1 billion, with an option to increase by $500 million for a maximum of $1.5 billion.
  • 3The credit facility expires in May 2017.
  • 4Borrowings under the new agreement are for general corporate purposes.
  • 5The agreement replaces a prior $1 billion credit agreement from December 1, 2006, with no outstanding borrowings under the old agreement.
  • 6A key financial covenant requires BD to maintain an interest expense coverage ratio of not less than 5-to-1.
  • 7Vincent A. Forlenza will become Chairman of the Board in addition to his CEO and President roles, effective July 1, 2012.

Frequently Asked Questions

The new Five Year Credit Agreement provides Becton, Dickinson and Company (BD) with a $1 billion revolving credit facility to be used for general corporate purposes. This strengthens the company's financial flexibility and access to capital.

The facility has a base commitment of $1 billion and includes an option for an additional $500 million, making the maximum aggregate commitment up to $1.5 billion. The credit facility expires in May 2017.

Yes, the agreement includes a financial covenant requiring BD to maintain an interest expense coverage ratio (earnings before income taxes, depreciation, and amortization to interest expense) of not less than 5-to-1 for the most recent four consecutive fiscal quarters.

Vincent A. Forlenza, who is currently the Chief Executive Officer and President, was elected to the additional role of Chairman of the Board, effective July 1, 2012.