Summary
Honeywell International Inc. (HON) filed an 8-K on August 5, 2016, reporting the entry into a $1.5 billion 364-Day Credit Agreement. This agreement is primarily for general corporate purposes, including funding the acquisition of the Intelligrated business and associated expenses. The credit facility has a maturity date of August 4, 2017, and includes provisions for mandatory reductions upon certain capital markets financing transactions. Key investor-focused aspects include the absence of restrictive financial covenants or dividend restrictions, providing flexibility for Honeywell's operations. However, the agreement does contain standard events of default, such as non-payment, covenant breaches, cross-defaults, and insolvency, which could lead to restrictions on further borrowing or acceleration of repayment. The credit agreement also includes specific triggers related to change of control events.
Key Highlights
- 1Honeywell entered into a $1.5 billion 364-Day Credit Agreement on August 5, 2016.
- 2The credit facility is intended for general corporate purposes, including funding the acquisition of the Intelligrated business.
- 3The agreement has a maturity date of August 4, 2017.
- 4It includes a mandatory reduction of commitments upon certain capital markets financing transactions.
- 5The credit agreement does not contain financial covenants or restrict dividend payments.
- 6Standard events of default are outlined, which could impact borrowing capabilities or require repayment.
- 7Specific change of control provisions allow lenders to terminate commitments, such as upon a 30% stock acquisition or significant board changes.