8-KFinancial Events

CORNING INC /NY 8-K Report, Financial Obligation (Nov 16, 2010)

Filed November 16, 2010For Securities:GLW

Summary

This 8-K filing from Corning Incorporated (GLW), dated November 15, 2010, reports on a significant short-term financing event. On November 10, 2010, Corning Finance Luxembourg S.a r.l. (CFL), a subsidiary, notified lenders under the company's Amended and Restated Credit Agreement of its intent to borrow $1.12 billion. This loan, which has a 30-day term and is guaranteed by the parent company, Corning Incorporated, is scheduled to be drawn on November 16, 2010. The purpose of this borrowing is to facilitate the repatriation of approximately $1.12 billion in funds back to the United States. The company intends to repay this loan in full by December 31, 2010. This action indicates a strategic move by Corning to access its overseas cash for domestic use, likely for operational needs, investments, or shareholder returns, while managing the timing and cost of repatriation. The financing mechanism chosen is a short-term loan secured by its existing credit facility.

Key Highlights

  • 1Corning Finance Luxembourg S.a r.l. will borrow $1.12 billion on November 16, 2010, under the company's Amended and Restated Credit Agreement.
  • 2The loan has a short term of 30 days and is guaranteed by the parent company, Corning Incorporated.
  • 3The primary purpose of the loan is to repatriate approximately $1.12 billion of funds to the United States.
  • 4Repayment of the loan is expected no later than December 31, 2010.
  • 5This transaction highlights Corning's strategy to move cash held overseas back to the U.S.

Frequently Asked Questions

Corning is taking out this loan not for new capital expenditures or debt, but as a mechanism to facilitate the repatriation of approximately $1.12 billion in cash held by its foreign subsidiary, Corning Finance Luxembourg S.a r.l., back to the United States. This allows the company to access its overseas cash reserves for domestic use.

The loan has a very short term of 30 days. Corning intends to repay the full $1.12 billion amount no later than December 31, 2010.

This loan utilizes Corning's existing Amended and Restated Credit Agreement. While it is a borrowing, it's structured as a temporary measure to move existing funds from overseas to the U.S. and is intended to be repaid shortly, so it's more of a cash management tool than an indication of new, long-term debt issuance.

In this financial context, 'repatriate' means to bring funds that are held by an overseas subsidiary back to the parent company's home country, which is the United States for Corning.