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.