Summary
This Form 8-K filing by Alcoa Inc. (the predecessor to Howmet Aerospace Inc.) on July 31, 2014, primarily announces the execution of two significant financing agreements. First, a $2.5 billion 364-day senior unsecured bridge term loan facility was established to finance the acquisition of the Firth Rixson business. This facility is designed to be short-term, maturing 364 days after the closing of the acquisition, and its availability is contingent on the consummation of the Firth Rixson deal. Second, the company entered into a $4.0 billion senior unsecured revolving credit facility, maturing in five years, to provide general corporate purposes and working capital. This new facility replaces a previous, undrawn $3.75 billion revolving credit agreement. Both facilities are unsecured and rank pari passu with other senior unsecured indebtedness, and they include covenants related to leverage ratios and limitations on asset sales and mergers.
Key Highlights
- 1Alcoa Inc. secured a $2.5 billion, 364-day bridge term loan facility to finance the acquisition of the Firth Rixson business.
- 2The bridge loan facility's borrowing is contingent on the successful completion of the Firth Rixson acquisition.
- 3A new $4.0 billion, five-year senior unsecured revolving credit facility was established for general corporate purposes and working capital.
- 4The new revolving credit facility replaces a prior $3.75 billion facility that was scheduled to mature in 2017.
- 5Both the bridge loan and the revolving credit facility are unsecured and rank equally with other unsecured, unsubordinated debt.
- 6Key covenants in both agreements include leverage ratio maintenance and restrictions on mergers and asset sales.
- 7The filing also notes the termination of the previous revolving credit agreement.