Summary
Johnson Controls International plc (JCI) filed an 8-K on January 11, 2019, primarily to disclose the execution of a new US$750,000,000 unsecured term loan credit agreement. This facility provides immediate access to significant liquidity for general business purposes. Notably, the loan matures on January 10, 2020, or five business days after the sale of the company's power solutions business, suggesting this funding might be a bridge or part of a larger strategic transaction involving that segment. The credit agreement imposes certain restrictions, including a covenant requiring the company to maintain consolidated shareholders' equity of at least $3.5 billion. The filing also outlines standard events of default and the consequences thereof, such as acceleration of the debt. Investors should monitor any developments regarding the power solutions business sale, as this could trigger the loan's maturity.
Key Highlights
- 1Entered into a US$750 million unsecured term loan credit agreement on January 11, 2019.
- 2The loan proceeds are intended for general business purposes.
- 3The term loan matures on January 10, 2020, or five business days after the sale of the power solutions business.
- 4The credit agreement includes a covenant requiring consolidated shareholders' equity to be at least $3.5 billion.
- 5Standard covenants and events of default are outlined in the agreement.
- 6U.S. Bank National Association acts as the administrative agent for the credit facility.