8-KMaterial AgreementsFinancial EventsExhibits & Filings

Johnson Controls International plc 8-K Report, Material Agreement (Apr 27, 2007)

Filed April 27, 2007For Securities:JCI

Summary

This 8-K filing from Tyco International Ltd. (though the filing mistakenly lists Johnson Controls International plc as the registrant, the content clearly pertains to Tyco International Ltd.) on April 26, 2007, details significant financing arrangements entered into on April 25, 2007. These include three bridge loan facilities totaling $10 billion and three revolving credit facilities initially totaling $2.5 billion, set to increase to $4.25 billion upon the anticipated separation of Covidien and Tyco Electronics. The primary purpose of these facilities is to support Tyco's planned spin-off into three independent companies, by funding tender offers for outstanding public debt and providing working capital for the ongoing operations of the separate entities. Investors should note that these facilities are directly linked to the strategic restructuring of Tyco. The bridge loans are intended to facilitate the retirement of existing debt in conjunction with the spin-off, while the revolving credit facilities will provide essential liquidity for the new independent companies. The financing structure indicates a substantial undertaking to de-lever and re-organize the company's capital structure to align with its future independent operational strategies.

Key Highlights

  • 1Tyco International Ltd. secured $10 billion in bridge loan facilities to finance its planned separation into three independent companies.
  • 2Three revolving credit facilities totaling $2.5 billion were also established, with a commitment increasing to $4.25 billion post-separation.
  • 3The bridge loans will be used to fund tender offers for substantially all of Tyco's outstanding public debt and Euro/Pound Sterling denominated debt.
  • 4The revolving credit facilities are intended for working capital, capital expenditures, and other corporate purposes for the new entities.
  • 5Upon separation, Covidien and Tyco Electronics will assume obligations for specific portions of the revolving credit facilities.
  • 6The bridge loan facilities have a maturity date of April 23, 2008, or earlier under certain conditions related to debt repayment or commitment termination.
  • 7The revolving credit facilities are scheduled to terminate on April 25, 2012, with an earlier termination date if the separation is not completed by April 23, 2008.

Frequently Asked Questions

Tyco International Ltd. is entering into these facilities as part of its strategic plan to separate into three independent, publicly traded companies. The bridge loans are specifically designed to fund tender offers to repurchase outstanding debt in preparation for the separation, while the revolving credit facilities will provide ongoing liquidity for the newly formed entities.

The bridge loan facilities, totaling $10 billion, are intended to finance tender offers to purchase 'substantially all' of Tyco's outstanding public debt, as well as all of TIGSA's outstanding Euro and Pound Sterling denominated debt. The exact amount retired will depend on the success of these tender offers.

Upon the completion of the separation, Covidien and Tyco Electronics will each assume responsibility for one of the revolving credit facilities, with specific commitments allocated to each entity. The bridge loan facilities are primarily for the separation event itself and have an earlier maturity date.

The bridge loan facilities mature on April 23, 2008, or earlier if certain conditions are met, such as the termination of commitments or significant voluntary prepayments of other debt. The revolving credit facilities are scheduled to terminate on April 25, 2012, unless the separation transactions are not consummated by April 23, 2008, in which case they will terminate on December 16, 2009.