Summary
Caterpillar Inc. (CAT) filed an 8-K on September 15, 2015, reporting on significant updates to its credit facilities. The company entered into a new $3.05 billion 364-day revolving credit facility, which expires in September 2016. This new facility includes provisions for borrowing in various currencies through addendums. Additionally, Caterpillar amended and extended its existing three-year and five-year credit agreements. The three-year facility, originally from 2010, is now extended to September 2018, and the five-year facility, originally from 2011, is extended to September 2020. These amendments aim to align terms with the new 364-day facility and include similar foreign currency borrowing capabilities. These facilities are available for general corporate purposes and are subject to certain financial covenants, including minimum consolidated net worth for Caterpillar and specific ratio requirements for Caterpillar Financial Services Corporation.
Key Highlights
- 1Entry into a new $3.05 billion unsecured revolving credit facility with a 364-day term, expiring September 9, 2016.
- 2Amendments and extensions to existing credit agreements: the three-year facility extended to September 10, 2018, and the five-year facility extended to September 10, 2020.
- 3The new and amended credit facilities include provisions for borrowing in various foreign currencies (e.g., Pounds Sterling, Euro, Japanese Yen) through specific addendums.
- 4All credit facilities are available for general corporate purposes.
- 5Financial covenants are in place, requiring Caterpillar to maintain a consolidated net worth of at least $9 billion.
- 6Caterpillar Financial Services Corporation must maintain an interest coverage ratio above 1.15 to 1 and a leverage ratio below 10.0 to 1.
- 7The filing incorporates by reference the full text of the various credit agreements and addendums as exhibits.