Summary
DOVER Corporation (DOV) announced on November 10, 2015, that it has entered into a new $1 billion, five-year unsecured revolving credit facility. This new facility replaces a similar existing credit agreement and is primarily intended to serve as a liquidity backup for the company's commercial paper program. The new facility has a maturity date of November 10, 2020, and includes an option to increase the facility by an additional $500 million. The credit agreement maintains substantially similar covenants to the previous facility, including restrictions on liens, mergers, asset sales, and changes in business lines. A key financial covenant requires DOVER to maintain a minimum interest coverage ratio of EBITDA to consolidated net interest expense of not less than 3.00:1.00. The agreement also outlines various interest rate options, including LIBOR and ABR, with an applicable margin that adjusts based on DOVER's senior unsecured debt ratings from S&P and Moody's. Up to $250 million of the facility can be used for letters of credit.
Key Highlights
- 1DOVER Corp entered into a new $1 billion, five-year unsecured revolving credit facility on November 10, 2015.
- 2The new credit facility replaces a similar $1 billion facility that was set to mature in November 2016.
- 3The facility has a maturity date of November 10, 2020.
- 4The company has the option to increase the credit facility by an additional $500 million.
- 5The primary purpose of the facility is to serve as liquidity back-up for DOVER's commercial paper program.
- 6The agreement includes customary covenants and restrictions on the company, similar to the prior facility.
- 7A key covenant requires maintaining a minimum interest coverage ratio of 3.00:1.00 (EBITDA to net interest expense).