Summary
Caterpillar Inc. (CAT) filed an 8-K report on September 29, 2004, detailing the execution of a new five-year Credit Agreement. This agreement establishes a substantial $2.5 billion credit facility designed primarily to serve as a backstop for Caterpillar's commercial paper program. This facility provides crucial assurance to commercial paper buyers regarding the company's ability to meet its obligations, thereby supporting its short-term financing needs. Notably, the company has historically not drawn upon this facility, indicating strong operational cash flow and reliable access to the commercial paper markets. The report also highlights the addition of specific addendums to accommodate Caterpillar Financial Services Corporation's (CFSC) international operations, enabling it to issue commercial paper and secure backstop facilities in various foreign currencies, including a yen-denominated facility for its Japanese finance subsidiary up to the equivalent of US$100 million.
Key Highlights
- 1Caterpillar entered into a new 5-year Credit Agreement on September 23, 2004.
- 2The agreement establishes a committed credit facility of $2.5 billion.
- 3The primary purpose of the facility is to serve as a backstop for Caterpillar's commercial paper program.
- 4This backstop provides assurance to commercial paper buyers about repayment sources.
- 5Caterpillar has never drawn on this credit facility historically.
- 6Addendums were introduced to support international operations of Caterpillar Financial Services Corporation (CFSC) in various currencies.
- 7A specific addendum allows borrowing in Japanese Yen for Caterpillar Finance Corporation (CFC) up to US$100 million equivalent.