Summary
FedEx Corporation (FDX) has filed an 8-K report detailing material definitive agreements related to its planned spin-off of FedEx Freight Holding Company, Inc. ("FedEx Freight"). The company has entered into two credit facilities for FedEx Freight: a five-year, $1.2 billion revolving credit facility and a three-year, $600 million delayed draw term loan facility. These facilities are critical for funding the spin-off, providing working capital, and covering associated expenses for the newly independent FedEx Freight entity.
Key Highlights
- 1FedEx Freight secures a $1.2 billion revolving credit facility and a $600 million delayed draw term loan facility.
- 2The credit facilities are contingent on the consummation of the planned spin-off of FedEx Freight.
- 3Proceeds from the term loan will primarily fund a cash distribution to FedEx, spin-off transactions, and related fees.
- 4Proceeds from the revolving credit facility will be used for general corporate purposes (including acquisitions) and spin-off expenses.
- 5FedEx Freight will be subject to leverage ratio covenants, starting at 3.75:1.00 and moving to 3.50:1.00 post-spin-off.
- 6Stephen E. Gorman resigned from the FedEx Board to join the board of FedEx Freight post-spin-off.