Summary
L3Harris Technologies, Inc. (LHX) has established a new $2.25 billion, three-year senior unsecured term loan facility, maturing on November 21, 2025. This new facility, entered into on November 22, 2022, with JPMorgan Chase Bank, N.A. as administrative agent, will provide up to two separate draws by June 30, 2023. The proceeds are earmarked for significant strategic purposes, including financing the acquisition of Viasat, Inc.'s tactical data links product line and repaying existing debt obligations, specifically the $250 million Floating Rate Notes due 2023. A portion of the funds is also allocated for fees, costs, and general corporate purposes up to $40 million. This move demonstrates L3Harris' commitment to strategic growth and financial flexibility. The company is proactively securing capital to fund key acquisitions, thereby strengthening its market position. The interest rates on the new facility are tied to either the SOFR rate or a base rate, plus an applicable margin that fluctuates based on L3Harris' senior unsecured long-term debt ratings, offering a degree of responsiveness to market conditions and company creditworthiness. The agreement includes standard covenants and events of default, similar to previous credit arrangements, and allows for prepayments under specific conditions.
Key Highlights
- 1Established a new $2.25 billion, three-year senior unsecured term loan facility.
- 2Proceeds to be used for acquiring Viasat, Inc.'s tactical data links product line.
- 3Will also be used to repay $250 million Floating Rate Notes due 2023.
- 4Facility provides for term loans in up to two separate draws by June 30, 2023.
- 5Interest rates are tied to SOFR or base rate plus a margin that varies with debt ratings.
- 6The loan agreement matures on November 21, 2025.
- 7Contains covenants and events of default similar to the existing credit agreement.