Summary
L3Harris Technologies, Inc. (formerly Harris Corporation) filed this 8-K report on March 3, 2015, to disclose significant updates to its credit facilities. The primary focus is an amendment to its revolving credit agreement, dated February 25, 2015. This amendment modifies terms related to subsidiary guarantees and adjusts financial maintenance covenants, notably increasing the permitted ratio of consolidated total indebtedness to total capital. These changes are specifically linked to the anticipated acquisition of Exelis, Inc. Further details reveal a joinder agreement and amendment to a commitment letter for a bridge facility, also dated February 25, 2015. This Joinder brings in several major financial institutions as parties to the commitment letter, indicating secured financing for the upcoming Exelis acquisition. Investors should note that these actions signal preparation for a significant corporate transaction, impacting the company's debt structure and financial flexibility.
Key Highlights
- 1Amendment to the revolving credit agreement entered on February 25, 2015.
- 2Modifications include requiring certain subsidiaries to become guarantors under the credit agreement.
- 3Financial maintenance covenant was amended to increase the permitted ratio of consolidated total indebtedness to total capital, from 0.600:1.00 to 0.650:1.00, with a temporary increase to 0.675:1.00 post-acquisition of Exelis.
- 4These covenant changes are effective before and after the acquisition of Exelis, Inc.
- 5A joinder agreement and amendment to a bridge commitment letter were also executed on February 25, 2015.
- 6Several new banks (Citibank, SunTrust, Wells Fargo, HSBC, Bank of America) joined the bridge facility commitment.
- 7The reported event date is February 25, 2015, with the filing date of March 2, 2015.