What is the primary purpose of this 8-K filing?

The primary purpose of this 8-K filing is to report Harris Corporation's entry into a new, larger revolving credit agreement, which replaces a previous one. It details the terms, conditions, and key financial aspects of this material definitive agreement.

How does the new credit agreement differ from the previous one?

The new credit agreement is for a larger amount ($750 million compared to $500 million) and extends the term to five years. It also offers more flexibility, including potential for further increases in credit availability, multi-currency borrowings, and a more dynamic interest rate structure based on credit ratings and usage.

What are the key financial covenants Harris must adhere to under the new agreement?

Harris must maintain a ratio of consolidated total indebtedness to total capital not greater than 0.60 to 1.00, and a ratio of consolidated EBITDA to consolidated net interest expense not less than 3.00 to 1.00 on a rolling four-quarter basis.

What happens if Harris Corporation defaults on this new credit agreement?

If an event of default occurs, the lenders have the right to terminate their commitments and declare all outstanding borrowings, along with accrued interest and fees, immediately due and payable. Events of default include failure to make payments, breach of covenants, material inaccuracy of representations, certain payment or acceleration defaults on other indebtedness, significant unsatisfied judgments, ERISA liabilities, bankruptcy, invalidity of agreement documents, or a change of control.

LHX 8-K: Material Agreements & Financial Events

Summary

This 8-K filing announces that Harris Corporation has entered into a new $750 million, five-year senior unsecured revolving credit agreement, effective September 10, 2008. This new facility replaces a previous $500 million agreement and provides enhanced flexibility and capacity for working capital and general corporate purposes. The new credit agreement offers a potential increase of up to an additional $500 million, bringing the total potential credit availability to $1.25 billion, subject to lender consent. It also includes provisions for borrowings in multiple currencies and introduces a tiered interest rate structure tied to the company's debt ratings and credit facility utilization. The agreement also details covenants and events of default, providing a framework for the company's ongoing financial obligations and operational flexibility. The increased credit limit and broader currency options suggest a strategic move by Harris Corporation to ensure robust financial resources for its operations and potential growth initiatives during a period of economic uncertainty. The termination of the prior agreement was executed without early termination penalties, indicating a smooth transition to the new, more substantial credit facility.

Key Highlights

1Harris Corporation entered into a new $750 million, five-year senior unsecured revolving credit agreement on September 10, 2008.
2The new agreement replaces a prior $500 million credit facility, increasing borrowing capacity.
3The credit agreement allows for potential increases up to an additional $500 million, for a total potential of $1.25 billion.
4Funds can be used for working capital and general corporate purposes, excluding hostile acquisitions.
5Borrowings can be denominated in U.S. Dollars, Euros, Sterling, and other approved currencies, with a non-U.S. currency sub-limit.
6Interest rates are variable, tied to LIBOR or a base rate plus an applicable margin, influenced by Senior Debt Ratings and credit facility utilization.
7The agreement includes financial covenants related to debt-to-capital ratios and EBITDA-to-interest expense, and various events of default.

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Sep 16, 2008)

Summary

Key Highlights

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