8-KMaterial AgreementsFinancial EventsExhibits & Filings

HONEYWELL INTERNATIONAL INC 8-K Report, Material Agreement (Apr 5, 2012)

Filed April 5, 2012For Securities:HONHONIV

Summary

Honeywell International Inc. filed an 8-K on April 4, 2012, to report the execution of a $3.0 billion Amended and Restated Five Year Credit Agreement, effective April 2, 2012. This agreement replaces a prior $2.8 billion credit facility and allows for potential increases up to $3.5 billion. The new credit line is primarily for general corporate purposes and offers improved pricing and an extended maturity date to April 2, 2017. Key aspects for investors include the significant size of the credit facility, indicating financial flexibility for the company's operations and strategic initiatives. Notably, the agreement does not impose dividend restrictions or financial covenants, providing management with considerable autonomy. However, standard conditions for borrowing and events of default are present, including provisions related to a change of control, which could impact future borrowing capabilities.

Key Highlights

  • 1Execution of a $3.0 billion Amended and Restated Five Year Credit Agreement, effective April 2, 2012.
  • 2The new credit facility replaces a prior $2.8 billion agreement, with potential to increase aggregate commitments to $3.5 billion.
  • 3The agreement is for general corporate purposes, providing financial flexibility.
  • 4Maturity date extended to April 2, 2017.
  • 5Includes a sublimit of $700 million for letters of credit and a EUR200 million sublimit for swing line advances.
  • 6The credit agreement does not contain financial covenants or restrict dividend payments.
  • 7Standard events of default and change of control provisions are included, which could affect borrowing capacity.

Frequently Asked Questions

The $3.0 billion Amended and Restated Five Year Credit Agreement is maintained for Honeywell's general corporate purposes, providing the company with financial flexibility for its operations and potential strategic needs.

The new agreement amends and restates a prior $2.8 billion credit agreement. It offers an increased total commitment (up to $3.5 billion from $3.0 billion initially), improved pricing, and an extended maturity date to April 2, 2017.

No, the credit agreement explicitly states that it does not restrict Honeywell's ability to pay dividends and does not contain financial covenants, which provides management with significant operational autonomy.

Borrowing would be prevented by standard conditions for borrowing and customary events of default. These include non-payment of debt, interest, or fees; non-compliance with covenants; cross-defaults with other debt; bankruptcy or insolvency; and defaults on certain ERISA obligations. Additionally, a lender's commitment can be terminated if a person acquires 30% or more of Honeywell's voting stock, or if there is a change in the majority of the Board of Directors within a 12-month period.