8-KMaterial AgreementsFinancial EventsExhibits & Filings

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Jun 29, 2018)

Filed June 29, 2018For Securities:LHX

Summary

L3Harris Technologies, Inc. (formerly Harris Corporation) announced on June 29, 2018, the establishment of a new $1 billion, five-year senior unsecured revolving credit facility, effective June 27, 2018. This new facility replaces a previous $1 billion credit agreement and matures on June 26, 2023. It provides flexibility for working capital, general corporate purposes, refinancing existing debt, and repaying commercial paper. The credit facility allows for borrowings in multiple currencies, including USD, Euros, and Sterling, with a sub-limit for non-USD currencies. It also includes an option to increase the total commitments by up to $500 million, bringing the potential aggregate amount to $1.5 billion. The terms of the agreement include various covenants, events of default, and interest rate structures tied to the company's senior debt ratings, offering potential cost savings as ratings improve.

Key Highlights

  • 1Established a new $1 billion, five-year senior unsecured revolving credit facility on June 27, 2018, maturing on June 26, 2023.
  • 2The new facility replaces a prior $1 billion credit agreement, with no outstanding loans or letters of credit at the time of termination.
  • 3Provides flexibility for working capital, general corporate purposes, debt refinancing, and commercial paper repayment.
  • 4Allows for borrowings in multiple currencies (USD, EUR, GBP, and others) with a $200 million sub-limit for non-USD currencies.
  • 5Includes an option to increase the credit facility by up to $500 million, potentially raising the total commitment to $1.5 billion.
  • 6Interest rates and fees are variable and linked to L3Harris's senior unsecured long-term debt ratings, potentially offering lower costs with improved creditworthiness.
  • 7The agreement contains standard covenants (affirmative and negative) and events of default, including a debt-to-capital ratio limit of 0.65:1.00.

Frequently Asked Questions

The new credit facility is primarily intended for working capital, general corporate purposes, refinancing existing debt, and repaying maturing commercial paper. It provides L3Harris with financial flexibility to manage its operations and strategic initiatives.

The facility is a $1 billion, five-year senior unsecured revolving credit facility, maturing on June 26, 2023. It allows for borrowings in multiple currencies, includes an option to increase the facility size by up to $500 million, and has interest rates and fees that vary based on the company's credit ratings.

This new credit facility replaces a previous $1 billion facility, and no loans or letters of credit were outstanding under the old agreement at the time of termination. The company is not restricted from using the new facility to refinance existing debt or repay maturing commercial paper.

Yes, the facility includes standard covenants, such as maintaining a specific debt-to-capital ratio (not to exceed 0.65:1.00), and specific events of default. Proceeds from borrowings are restricted from being used for hostile acquisitions or any unlawful purposes.