8-KMaterial AgreementsFinancial EventsExhibits & Filings

HONEYWELL INTERNATIONAL INC 8-K Report, Material Agreement (Jul 10, 2015)

Filed July 10, 2015For Securities:HONHONIV

Summary

On July 10, 2015, Honeywell International Inc. announced a significant update to its financing structure by entering into a $4.0 billion Amended and Restated Five Year Credit Agreement. This new agreement effectively replaces a prior $4.0 billion facility from December 2013, with the crucial distinction of extending the maturity date to July 10, 2020, and improving pricing terms. Notably, no borrowings were outstanding under the previous agreement, indicating this is a proactive measure for liquidity management and flexibility. The credit facility is designed for general corporate purposes, including a $500 million sublimit for letters of credit and a EUR200 million sublimit for swing line advances. A key takeaway for investors is the absence of restrictive financial covenants or dividend limitations, though customary conditions for borrowing and events of default, such as non-payment, breaches, cross-defaults, and insolvency, remain in place. The agreement also includes provisions that could impact lenders' commitments in the event of a significant change in control or board composition.

Key Highlights

  • 1Honeywell entered into a $4.0 billion Amended and Restated Five Year Credit Agreement on July 10, 2015.
  • 2The new credit agreement extends the maturity date to July 10, 2020.
  • 3The agreement replaces a prior $4.0 billion credit facility dated December 10, 2013.
  • 4No borrowings were outstanding under the prior agreement.
  • 5The credit facility is for general corporate purposes and can be increased up to $4.5 billion.
  • 6The agreement does not contain financial covenants or restrict dividend payments.
  • 7Key events of default include non-payment, covenant breaches, cross-defaults, and insolvency.

Frequently Asked Questions

The primary purpose of the $4.0 billion Amended and Restated Five Year Credit Agreement is to provide Honeywell with financial flexibility for general corporate purposes. It replaces an older agreement and extends the maturity, ensuring continued access to liquidity.

No, the filing explicitly states that no borrowings were outstanding under the previous credit agreement that this new one is replacing. This indicates it is a proactive measure for future financial needs rather than addressing immediate debt.

No, the agreement does not restrict Honeywell's ability to pay dividends. It also does not contain financial covenants, which is a positive sign for financial flexibility. However, it does include customary events of default that, if triggered, could prevent further borrowing or require repayment of outstanding debt.

The agreement includes provisions where lenders have the right to terminate their commitment to lend if a person or group acquires 30% or more of Honeywell's voting stock, or if there is a significant turnover in the Board of Directors that is not approved by the existing board. This is a standard 'change of control' clause.