Summary
Cummins Inc. (CMI) announced on December 7, 2004, the execution of a new $650 million unsecured, five-year revolving credit agreement, effective December 1, 2004. This new facility replaces a previous secured credit agreement of $385 million that was set to expire in November 2005. The transition to an unsecured facility and the increase in borrowing capacity are significant developments that reflect the company's strengthened financial performance and its strategic efforts to improve credit ratings. The new credit agreement provides increased liquidity and improved pricing compared to the previous facility, with a maturity date of December 1, 2009. It is intended for general corporate purposes and letter of credit issuances. While Cummins does not currently anticipate drawing on the facility for debt repayment, its ample availability offers financial flexibility for future growth initiatives. The expanded syndicate includes twenty banks from key global regions, highlighting strong market confidence in Cummins.
Key Highlights
- 1Cummins Inc. entered into a new $650 million unsecured, five-year revolving credit agreement, maturing December 1, 2009.
- 2The new credit facility replaces a prior secured $385 million facility that was due to expire in November 2005.
- 3The transition to an unsecured facility signifies improved credit ratings and strengthened financial performance for Cummins.
- 4The borrowing capacity has been significantly increased from $385 million to $650 million.
- 5The new agreement offers improved pricing and enhanced liquidity for general corporate purposes and letter of credit issuance.
- 6Twenty global banks are participating in the new revolving credit facility, indicating broad market support.
- 7Guarantees for the new credit facility are provided by several wholly-owned subsidiaries of Cummins.