8-KMaterial AgreementsFinancial EventsExhibits & Filings

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Nov 28, 2022)

Filed November 28, 2022For Securities:LHX

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.

Frequently Asked Questions

The primary purposes of the new $2.25 billion loan facility are to finance the acquisition of Viasat, Inc.'s tactical data links product line and to repay L3Harris' existing $250 million Floating Rate Notes due 2023. A portion of the funds can also be used for fees, costs, and general corporate purposes up to $40 million.

Borrowings under the new loan facility will bear interest at either the SOFR rate plus an applicable margin (initially 1.250%) or the base rate plus an applicable margin (initially 0.250%). These applicable margins vary based on L3Harris' senior unsecured long-term debt ratings.

The new senior unsecured term loan facility matures on November 21, 2025.

L3Harris may prepay amounts borrowed under the loan agreement at any time. However, the company is required to prepay all outstanding term loans from the proceeds of any new indebtedness, subject to certain exceptions. These exceptions include proceeds from their existing revolving credit agreement, indebtedness incurred in the ordinary course of business, indebtedness used to fund acquisitions, refinancings, commercial paper issuances, letters of credit, working capital facilities of foreign subsidiaries, and other indebtedness up to $500 million.