Summary
Emerson Electric Co. (EMR) filed an 8-K on May 29, 2018, to report the entry into a new material definitive agreement concerning its credit facilities. Specifically, on May 23, 2018, the company entered into a new $3.5 billion five-year revolving credit facility, set to expire in May 2023. This new facility replaces a previous, similar $3.5 billion facility that was terminated on the same day. This refinancing demonstrates Emerson's proactive approach to managing its liquidity and financial flexibility. While the company has no current intention to draw on the facility, it provides a significant backstop for general corporate purposes, including commercial paper borrowings, ensuring operational continuity and strategic maneuverability. The unsecured nature of the facility and its flexibility in currency and subsidiary borrowing are notable features for investors assessing the company's financial structure.
Key Highlights
- 1Emerson Electric entered into a new $3.5 billion five-year revolving credit facility on May 23, 2018.
- 2The new facility expires in May 2023 and replaces a prior, similar $3.5 billion facility.
- 3The previous credit facility dated April 30, 2014, was terminated on May 23, 2018.
- 4There are no outstanding loans or letters of credit currently under the new facility.
- 5Emerson has no current intention to utilize borrowings under this or prior facilities.
- 6The new credit facility is unsecured and supports general corporate purposes, including commercial paper.
- 7The facility allows for subsidiary borrowers and can be denominated in various currencies, subject to agreement terms.