Summary
Caterpillar Inc. (CAT) has entered into a new $3.15 billion unsecured revolving credit facility, referred to as the '364-Day Facility,' which replaces its previous similar agreement. This new facility, effective September 3, 2020, and expiring September 2, 2021, provides liquidity for general corporate purposes. The agreement includes provisions for borrowing in various currencies up to equivalent amounts of $100 million for Pounds Sterling, Euros, and Japanese Yen through separate addendums, enhancing flexibility for its subsidiaries Cat Financial, CIF, and CFKK. Importantly, the facility includes specific financial covenants designed to ensure the company's financial health. Caterpillar is required to maintain a minimum consolidated net worth of $9 billion. Cat Financial must adhere to an interest coverage ratio above 1.15 to 1 and a leverage ratio (consolidated debt to consolidated net worth) not exceeding 10.0 to 1. As of the filing date, no funds had been drawn from this new credit facility, indicating current liquidity is sufficient.
Key Highlights
- 1Caterpillar entered into a new $3.15 billion unsecured revolving credit facility (364-Day Facility) effective September 3, 2020.
- 2This facility replaces a prior 364-day facility and expires on September 2, 2021.
- 3The credit facility is available for general corporate purposes.
- 4Includes addendums for borrowing up to the equivalent of $100 million in Pounds Sterling and Euros via CIF, and Japanese Yen via CFKK.
- 5Key financial covenants include a minimum consolidated net worth of $9 billion for Caterpillar.
- 6Cat Financial must maintain an interest coverage ratio above 1.15:1 and a leverage ratio not greater than 10.0:1.
- 7No funds had been drawn on the facility as of the filing date.