Summary
Honeywell International Inc. (HON) announced on September 30, 2015, the entry into a new $3.0 billion 364-Day Credit Agreement. This facility is primarily intended to support the acquisition of the Elster Division of Melrose Industries plc, along with associated fees and expenses. The agreement provides significant financial flexibility, with no restrictions on dividend payments and no financial covenants, which are favorable terms for investors. The credit facility has a maturity date of September 28, 2016, and includes a mandatory reduction clause tied to Honeywell's capital markets financing activities. While standard conditions and events of default apply, the absence of covenants tied to debt ratings or Material Adverse Change offers a degree of stability and predictability in accessing these funds. This proactive financing step demonstrates Honeywell's commitment to strategic growth initiatives.
Key Highlights
- 1Honeywell entered into a $3.0 billion 364-Day Credit Agreement on September 30, 2015.
- 2The primary purpose of the credit facility is to finance the acquisition of the Elster Division of Melrose Industries plc.
- 3The agreement does not contain financial covenants, providing flexibility for the company.
- 4Honeywell retains the ability to pay dividends without restriction under the terms of the credit agreement.
- 5The credit facility matures on September 28, 2016.
- 6There is a mandatory reduction in commitments upon completion of certain capital markets financing transactions.
- 7The credit agreement is not subject to termination based on a decrease in debt ratings or a Material Adverse Change.