Summary
L3Harris Technologies (then Harris Corporation) entered into a new $300 million unsecured 364-day revolving credit agreement on September 29, 2010. This facility, with SunTrust Bank as the administrative agent, is intended for general corporate purposes, including working capital and supporting its commercial paper program. This new credit line supplements an existing $750 million five-year senior unsecured revolving credit facility. The company's short-term debt stood at approximately $275 million as of the filing date, primarily to finance a portion of the recent $525 million acquisition of CapRock Communications. The 364-day facility matures on September 28, 2011, and no borrowings were outstanding at the time of the agreement. Investors should note the terms, including interest rate options (LIBOR or base rate plus margins), commitment fees, and covenants related to financial ratios and events of default, which are tied to the company's senior unsecured long-term debt ratings.
Key Highlights
- 1Harris Corporation entered into a new $300 million unsecured 364-day revolving credit agreement.
- 2The new credit facility supplements an existing $750 million five-year senior unsecured revolving credit facility.
- 3The purpose of the 364-day facility is for working capital, general corporate purposes, and supporting commercial paper.
- 4The agreement was used to partially fund the recent acquisition of CapRock Communications ($525 million).
- 5Interest rates are based on LIBOR or base rate, plus applicable margins that vary with the company's debt ratings.
- 6The credit agreement includes commitment fees and financial covenants related to leverage and interest coverage ratios.
- 7Events of default include payment failures, covenant breaches, material misrepresentations, cross-defaults on other debt, and change of control.