8-KMaterial AgreementsFinancial EventsExhibits & Filings

EMERSON ELECTRIC CO 8-K Report, Material Agreement (May 29, 2018)

Filed May 29, 2018For Securities:EMR

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.

Frequently Asked Questions

This 8-K filing announces Emerson Electric's entry into a new $3.5 billion five-year revolving credit facility and the termination of its previous, similar credit facility. It's a report on a material definitive agreement and a change in financial obligations.

The new $3.5 billion revolving credit facility provides Emerson with significant financial flexibility and liquidity for general corporate purposes. Although the company currently has no intention to borrow, having this facility in place offers a safety net for potential future needs, such as supporting commercial paper programs or managing working capital.

While the filing doesn't explicitly state the reasons for the replacement, it's common practice for companies to refinance credit facilities to secure more favorable terms, extend maturity dates, or adapt to changing market conditions and corporate strategies. The new facility has a similar size and term, suggesting a refinancing rather than a change in credit capacity.

No, the filing explicitly states that there are no outstanding loans or letters of credit under the new 2018 Facility, and the company has no current intention to incur borrowings. This facility acts as an available source of funds, not as existing debt.