8-KMaterial AgreementsFinancial EventsExhibits & Filings

TechnipFMC plc 8-K Report, Material Agreement (Sep 20, 2017)

Filed September 20, 2017For Securities:FTI

Summary

TechnipFMC plc (FTI) announced on September 14, 2017, the establishment of a new commercial paper program for its subsidiary, FMC Technologies, Inc. (FMCTI). This program allows FMCTI to issue unsecured commercial paper notes with an aggregate principal amount not exceeding $1.5 billion. The proceeds from these issuances are intended for general corporate purposes. Crucially, TechnipFMC plc will unconditionally guarantee these notes. This guarantee signifies the parent company's commitment to the obligations of its subsidiary, providing an added layer of security for the commercial paper holders. The notes will mature within 365 days and will rank pari passu with other unsecured and unsubordinated debt of both FMCTI and TechnipFMC plc, respectively.

Key Highlights

  • 1TechnipFMC plc's subsidiary, FMC Technologies, Inc., has established a $1.5 billion commercial paper program.
  • 2The program allows for the issuance of unsecured commercial paper notes maturing within 365 days.
  • 3TechnipFMC plc provides an unconditional guarantee for the commercial paper notes.
  • 4Proceeds from the program are designated for general corporate purposes.
  • 5The commercial paper notes and the guarantee will rank at least pari passu with existing unsecured and unsubordinated debt.
  • 6The program utilizes an exemption from registration under the Securities Act of 1933.
  • 7Five dealers have entered into commercial paper dealer agreements with FMC Technologies, Inc.

Frequently Asked Questions

The primary purpose of the commercial paper program is to provide FMC Technologies, Inc. with a flexible source of short-term funding for general corporate purposes, allowing for borrowing, repayment, and re-borrowing up to a maximum of $1.5 billion.

TechnipFMC plc's unconditional guarantee is a significant factor for investors as it backs the commercial paper notes issued by its subsidiary. This means that TechnipFMC plc is legally obligated to ensure that the notes are repaid, offering a higher level of credit assurance than if the notes were solely the obligation of FMC Technologies, Inc.

While the commercial paper program itself is a short-term debt instrument, the aggregate amount outstanding cannot exceed $1.5 billion. The company's overall financial leverage will depend on how much it utilizes this program and how the proceeds are managed. The 'pari passu' ranking indicates it's treated equally with other unsecured debt.

No, the commercial paper notes and the guarantee have not been registered under the Securities Act of 1933. They are being issued under an exemption from registration, specifically Section 4(a)(2) of the Act, which is typical for commercial paper programs targeting sophisticated investors.