Summary
Caterpillar Inc. (CAT) filed an 8-K on September 10, 2019, detailing significant updates to its credit facilities. The company entered into a new $3.15 billion 364-day revolving credit facility, replacing its previous one. This new facility includes provisions for borrowing in Pounds Sterling and Euros up to $100 million and Japanese Yen up to $100 million, subject to the overall facility limit. Furthermore, Caterpillar amended and restated its existing three-year and five-year credit agreements, extending their maturity dates to September 5, 2022, and September 5, 2024, respectively. These credit facilities are available for general corporate purposes and were undrawn as of the filing date. The agreements include financial covenants, such as a minimum consolidated net worth requirement for Caterpillar and specific leverage and interest coverage ratios for Caterpillar Financial Services Corporation, designed to ensure financial stability.
Key Highlights
- 1Caterpillar entered into a new $3.15 billion unsecured 364-day revolving credit facility, effective September 5, 2019.
- 2The new 364-day facility replaces a prior agreement of the same term from September 2018.
- 3The company also amended and extended its existing three-year and five-year credit facilities, now maturing on September 5, 2022, and September 5, 2024, respectively.
- 4The credit facilities can be used for general corporate purposes.
- 5As of the filing date, no amounts had been drawn under any of the credit facilities.
- 6Key financial covenants include Caterpillar maintaining a minimum consolidated net worth of $9 billion.
- 7Caterpillar Financial Services Corporation must maintain an interest coverage ratio above 1.15:1 and a leverage ratio not greater than 10.0:1.