01—Abstract
Summary
Summary of the 8-K filed June 7, 2024. Cited figures are marked; the original filing is the authoritative source.
The Estée Lauder Companies Inc. entered into a new senior unsecured credit agreement on June 7, 2024 with JPMorgan Chase Bank, N.A. as administrative agent, among the Company, its Eligible Subsidiaries, and a group of lenders.
The agreement provides a 5-year revolving credit facility of $2.5 billiona, fully undrawn and available at signing, for general corporate purposes. The facility commenced on June 7, 2024 and expires June 7, 2029, unless extended for up to two additional years under the agreement's terms. The new facility replaced, and is substantially similar to, the Company's $2.5 billion revolving credit facility entered into on October 22, 2021, which the Company terminated on the same date.
No loans were outstanding under the prior facility at the time of replacement. Up to the equivalent of $750 millionb of the new facility is available for multicurrency loans in Pounds Sterling, Euros, Japanese Yen and Swiss Francs, with up to $150 million available for letters of credit. The Company may increase the facility by up to $500 million at its election, and the Company will guarantee the obligations of the Borrowers other than itself.
The agreement includes customary affirmative and negative covenants, such as limitations on consolidations, mergers, asset sales, liens, and subsidiary debt, along with customary events of default, including change of control and insolvency-related defaults. Certain lenders and their affiliates have other financial relationships with the Company, including cash management, commercial banking, and derivative arrangements. The filing also reports the related Item 2.03 disclosure, which is incorporated from Item 1.01.
02—Key points
Key Highlights
- New $2.5 billion five-year senior unsecured revolving credit facility entered into June 7, 2024, expiring June 7, 2029 unless extended by up to two additional years.
- The facility is fully undrawn and available, with proceeds to be used for general corporate purposes.
- The new facility replaced the Company's $2.5 billion revolving credit facility dated October 22, 2021, which had no loans outstanding as of June 7, 2024.
- Up to the equivalent of $750 million may be drawn in Pounds Sterling, Euros, Japanese Yen and Swiss Francs; up to $150 million may be used for letters of credit.
- The Company may increase the facility by up to $500 million at its election, and guarantees the Borrowers' obligations.
- Covenants are customary for this type of facility and include limits on mergers, asset sales, liens, and subsidiary debt, plus customary events of default including change of control.
- JPMorgan Chase Bank, N.A. serves as administrative agent; certain lenders have other existing financial relationships with the Company.
03—Questions
Frequently Asked Questions
How large is the new credit facility and when does it mature?
The new facility is a $2.5 billion five-year revolving credit facility that commenced June 7, 2024 and expires June 7, 2029, unless extended for up to two additional years under the agreement's terms.
Is the Company currently borrowing under the facility?
No. The filing states that the entire $2.5 billion amount is currently undrawn and available.
What happened to the Company's prior credit facility?
The Company terminated its credit agreement dated October 22, 2021 on June 7, 2024, in connection with entering the new agreement. The filing states no loans were outstanding under that facility on June 7, 2024.
Can the facility be used in currencies other than U.S. dollars?
Yes. Up to the equivalent of $750 million of the facility is available for multicurrency loans in Pounds Sterling, Euros, Japanese Yen and Swiss Francs.
What events could allow lenders to accelerate or terminate the facility?
Customary events of default include nonpayment, material inaccuracies in representations, covenant violations, bankruptcy events, certain ERISA events, material judgments, changes of control, or invalidity of the Company's guaranty. Insolvency or bankruptcy-related defaults cause automatic acceleration and termination of commitments.
04—Continue