Summary
Carrier Global Corporation (CARR) announced on May 24, 2023, its entry into new, significant credit agreements effective May 19, 2023. These agreements establish a $2 billion, 5-year senior unsecured revolving credit facility and a $500 million, 364-day senior unsecured revolving credit facility. Additionally, a senior unsecured delayed draw term loan credit agreement permits borrowings of up to €2.3 billion, structured in two tranches with maturities of 18 months and 3 years after the closing date. These new facilities replace the company's prior credit agreement and are designed to support its commercial paper program, general cash requirements, and notably, to finance a portion of its recently announced acquisition of Viessmann Group's climate solutions business. Key terms include borrowings in USD or EUR with various interest rate options tied to SOFR, Alternate Base Rate, or EURIBOR, plus ratings-based margins. The agreements contain standard covenants for investment-grade financings, including affirmative and negative covenants, a consolidated total net leverage ratio financial covenant, and customary events of default. The termination of the previous credit agreement and the reduction in commitments under a bridge term loan facility are directly linked to the effectiveness of these new credit facilities and the ongoing acquisition.
Key Highlights
- 1Carrier Global Corporation has secured new credit facilities totaling $2.5 billion in revolving credit and up to €2.3 billion in delayed draw term loans.
- 2The new credit agreements replace the company's previous revolving credit facility.
- 3The primary purpose of these new facilities includes supporting the company's commercial paper program, operational cash needs, and financing the acquisition of Viessmann Group's climate solutions business.
- 4Borrowings can be made in U.S. Dollars or Euros, with interest rates based on market benchmarks (SOFR, Alternate Base Rate, EURIBOR) plus a ratings-based margin.
- 5The agreements include customary covenants and a financial covenant based on consolidated total net leverage ratio, indicating a commitment to financial discipline.
- 6The company terminated its prior $2.0 billion senior unsecured revolving credit facility concurrently with entering into the new agreements.
- 7Commitments for a previously established senior unsecured bridge term loan facility have been reduced from EUR 8.2 billion to EUR 5.9 billion, reflecting the progression of the Viessmann acquisition financing.