8-KMaterial AgreementsFinancial EventsExhibits & Filings

CARPENTER TECHNOLOGY CORP 8-K Report, Material Agreement (Jul 1, 2013)

Filed July 1, 2013For Securities:CRS

Summary

Carpenter Technology Corporation (CRS) announced on June 28, 2013, the execution of a new $500 million unsecured revolving credit facility, which can be increased to $700 million. This facility replaces their prior agreement and extends the maturity date to June 28, 2018. The primary purpose of this new credit line is to provide funding for working capital and general corporate needs, offering flexibility in managing financial operations. The new credit facility introduces variable interest rates tied to a "Base Rate" or "Eurocurrency Rate," with margins and commitment fees that are contingent on the company's senior unsecured long-term debt rating. This structure allows for potentially lower borrowing costs if the company's credit profile improves. The agreement also includes standard financial and restrictive covenants designed to maintain financial stability and protect lenders, such as minimum interest coverage and maximum debt-to-capital ratios, along with limitations on additional indebtedness, acquisitions, and asset sales.

Key Highlights

  • 1New $500 million unsecured revolving credit facility established on June 28, 2013.
  • 2Facility has an option to increase the commitment to $700 million.
  • 3Replaces the previous credit agreement dated June 21, 2011.
  • 4Extended maturity date to June 28, 2018.
  • 5Funds are available for working capital and general corporate purposes.
  • 6Interest rates are variable, based on 'Base Rate' or 'Eurocurrency Rate,' influenced by the company's debt rating.
  • 7Includes financial covenants such as a minimum interest coverage ratio (3.50:1.00) and a maximum debt-to-capital ratio (55%).

Frequently Asked Questions

The new credit facility is primarily intended to provide Carpenter Technology Corp with access to funds for working capital and other general corporate purposes, offering financial flexibility for its operations.

The new unsecured revolving credit facility has an initial commitment amount of $500,000,000, with the company having the right to request an increase up to an aggregate of $700,000,000. The facility extends to June 28, 2018.

Interest rates will vary and are based on a defined "Base Rate" or "Eurocurrency Rate." The applicable margin added to these rates is determined by Carpenter Technology's senior unsecured long-term debt rating, meaning the cost of borrowing could fluctuate based on the company's creditworthiness.

The agreement includes several covenants, such as maintaining a minimum interest coverage ratio of 3.50 to 1.00 and a maximum debt-to-capital ratio of 55%. It also restricts additional indebtedness, new liens, certain acquisitions, mergers, and asset sales, as well as dividend payments under specific adverse conditions.