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.