Summary
Caterpillar Inc. (CAT) filed an 8-K on September 14, 2016, reporting on material definitive agreements related to its credit facilities. The company entered into a new $3.05 billion, 364-day unsecured revolving credit facility, expiring September 7, 2017, which also includes provisions for local currency borrowings up to $100 million each in Sterling/Euro and Japanese Yen. This new facility is intended for general corporate purposes and has not been drawn upon. In addition to the new facility, Caterpillar amended and extended its existing three-year and five-year credit agreements. The three-year facility's maturity was extended to September 10, 2019, and the five-year facility's maturity was extended to September 10, 2021. These amendments align certain terms with the new 364-day facility, including advances, use of proceeds, and representations. The report also outlines key financial covenants, requiring Caterpillar to maintain a consolidated net worth of at least $9 billion and for Caterpillar Financial Services Corporation to adhere to specific interest coverage and leverage ratios.
Key Highlights
- 1Caterpillar established a new $3.05 billion, 364-day unsecured revolving credit facility.
- 2The new facility includes provisions for up to $100 million in Euro/Pound Sterling and $100 million in Japanese Yen borrowings.
- 3Existing three-year and five-year credit facilities were amended and extended.
- 4The three-year facility maturity extended to September 10, 2019.
- 5The five-year facility maturity extended to September 10, 2021.
- 6The credit facilities are available for general corporate purposes and have not been utilized as of the filing date.
- 7Key financial covenants include a minimum consolidated net worth of $9 billion for Caterpillar and specific leverage/coverage ratios for Caterpillar Financial Services.