Summary
Cummins Inc. (CMI) filed an 8-K on August 21, 2019, to report on a significant amendment to its credit facilities. The company entered into an Amended and Restated 364-Day Credit Agreement, increasing its available revolving and swingline loan capacity to up to $1.5 billion, expiring on August 19, 2020. This agreement is unsecured, and Cummins Inc. will guarantee subsidiary borrowings. The facility also includes options for incremental loans and a "Term-Out Option" to convert revolving loans into term loans.
Key Highlights
- 1Cummins Inc. secured an Amended and Restated 364-Day Credit Agreement with a total capacity of up to $1.5 billion.
- 2The new credit agreement matures on August 19, 2020, providing short-term liquidity.
- 3The facility is unsecured, indicating the company's strong credit standing.
- 4The company retains the flexibility to request up to $750 million in incremental term loans or revolving commitments.
- 5A "Term-Out Option" allows for the conversion of revolving loans into term loans maturing one year after the commitment termination date.
- 6The agreement includes a financial covenant limiting the consolidated net debt to consolidated total capital ratio to 0.65:1.
- 7An amendment was also made to the existing 5-Year Credit Agreement to align with changes in the 364-Day agreement.