Summary
Honeywell International Inc. (HON) filed an 8-K on April 3, 2011, to report the entry into a new $2.8 billion Five Year Credit Agreement, effective March 31, 2011. This new agreement replaces a prior credit facility and is primarily for general corporate purposes, including supporting commercial paper issuance. Notably, the new credit agreement offers flexibility with an option to increase commitments up to $3.5 billion. The agreement is structured to provide continued financial flexibility for Honeywell. It does not impose restrictions on dividend payments or include financial covenants, which is a positive indicator for shareholders. The facility has a maturity date of March 31, 2016, and includes sublimits for letters of credit and swing line advances. The details of the new agreement largely mirror the previous one, suggesting stability in Honeywell's financing arrangements.
Key Highlights
- 1Honeywell entered into a new $2.8 billion Five Year Credit Agreement effective March 31, 2011.
- 2The new credit facility is intended for general corporate purposes, including support for commercial paper issuance.
- 3The agreement allows for an increase in commitments up to $3.5 billion.
- 4The credit agreement replaces a prior agreement dated May 14, 2007, which is now terminated.
- 5No borrowings were outstanding under the previous agreement.
- 6The new facility does not restrict dividend payments or contain financial covenants.
- 7Borrowings will mature no later than March 31, 2016, with potential extensions.
- 8The agreement includes specific sublimits for multi-currency letters of credit ($700 million) and swing line advances (EUR200 million).