Summary
Danaher Corporation (DHR) filed an 8-K on July 10, 2015, to report the entry into two significant new credit facilities. The company replaced its existing $2.5 billion unsecured revolving credit facility with an amended and restated $4.0 billion, 5-year unsecured revolving credit facility expiring in July 2020, with an option for a one-year extension and a $1.0 billion expansion option. Additionally, Danaher established a new $7.0 billion, 364-day unsecured revolving credit facility expiring in July 2016, with an option to convert outstanding loans into term loans for an additional year. These credit facilities are intended to provide liquidity support for Danaher's commercial paper programs and for general corporate purposes. Notably, a portion of the proceeds from commercial paper issuance, funded by these credit facilities, is earmarked for the acquisition of Pall Corporation, signaling a significant strategic move for Danaher. The facilities include covenants, such as a maximum consolidated leverage ratio of 0.65 to 1.00, and are unsecured, with Danaher guaranteeing subsidiary borrowings.
Key Highlights
- 1Danaher established a new $4.0 billion, 5-year unsecured revolving credit facility, replacing a prior $2.5 billion facility.
- 2A new $7.0 billion, 364-day unsecured revolving credit facility was also secured.
- 3The new credit facilities total $11.0 billion in committed lines.
- 4Borrowings under the 5-year facility have interest rates tied to LIBOR or a base rate, plus a margin based on credit rating, and incur a facility fee.
- 5The 364-day facility has a fixed margin over LIBOR or a base rate and a lower facility fee.
- 6A key intended use of these facilities is to support liquidity for commercial paper programs and general corporate purposes, specifically mentioning funding a portion of the Pall Corporation acquisition.
- 7The credit facilities require Danaher to maintain a consolidated leverage ratio of 0.65 to 1.00 or less.