8-KMaterial AgreementsFinancial Events

Chubb Ltd 8-K Report, Material Agreement (Oct 30, 2017)

Filed October 30, 2017For Securities:CB

Summary

Chubb Ltd. (CB) has filed an 8-K report detailing the amendment and restatement of its credit agreement. The company entered into a new unsecured credit agreement on October 25, 2017, with a total availability of up to $1,000,000,000, which can be increased by an additional $1,000,000,000 subject to additional commitments. This facility is primarily for working capital and general corporate purposes, including the issuance of letters of credit and revolving loans. The amended agreement replaces a prior syndicated credit agreement and maintains substantially similar terms and conditions. Key financial covenants require Chubb to maintain a minimum consolidated net worth of $34,985,000,000 and a debt-to-total capitalization ratio not exceeding 0.35 to 1. The agreement also includes standard covenants and events of default, with an expiration date set for October 25, 2022, though letters of credit may extend beyond this.

Key Highlights

  • 1Chubb Ltd. amended and restated its unsecured credit agreement on October 25, 2017.
  • 2The new credit agreement provides for up to $1,000,000,000 in availability, with an option to increase by another $1,000,000,000.
  • 3Funds from the credit facility are designated for working capital and general corporate purposes, including letters of credit and revolving loans.
  • 4The agreement replaces a prior syndicated credit facility and maintains similar terms and conditions.
  • 5Key financial covenants include a minimum consolidated net worth of $34,985,000,000 and a maximum debt-to-total capitalization ratio of 0.35:1.
  • 6The credit agreement contains customary covenants and events of default, offering financial flexibility within defined parameters.
  • 7The facility is scheduled to expire on October 25, 2022, with potential extensions for outstanding letters of credit.

Frequently Asked Questions

The primary purpose of the amended and restated credit agreement is to provide Chubb Ltd. with up to $1,000,000,000 (with a potential increase to $2,000,000,000) for working capital and general corporate purposes. This includes the ability to issue letters of credit and engage in revolving loans, offering financial flexibility.

Chubb must maintain a minimum consolidated net worth of $34,985,000,000 and ensure that its ratio of consolidated total debt to total capitalization does not exceed 0.35 to 1. These covenants are designed to ensure the company's financial stability.

The credit agreement is scheduled to expire on October 25, 2022. However, any letters of credit that are outstanding at the time of expiration may remain in effect for up to an additional year, in accordance with their terms.

The base availability is $1,000,000,000, which is a decrease from the $1,500,000,000 capacity under the prior agreement as supplemented. However, Chubb has the option to increase the total availability by an additional $1,000,000,000, subject to obtaining additional commitments from lenders. The terms and conditions are substantially similar to the prior agreement.