What is the primary purpose of the new $2.4 billion credit facility?

The primary purpose of the new $2.4 billion, 364-day senior unsecured revolving credit facility is to finance a portion of the purchase price for L3Harris's acquisition of Aerojet Rocketdyne Holdings, Inc., along with related fees, taxes, costs, and expenses. After the initial funding for the acquisition, any remaining proceeds may be used for working capital purposes.

What is the new commercial paper program and how much can L3Harris issue?

L3Harris has established a new commercial paper program under which it may issue unsecured commercial paper notes up to a maximum aggregate amount of $3.4 billion outstanding at any time. This program is supported by amounts available under its existing and new credit facilities.

What are the implications of the FTC's request for additional information on the Aerojet acquisition?

The request for additional information from the Federal Trade Commission indicates that the regulatory review of the Aerojet acquisition is continuing and may involve a more in-depth examination. While this can extend the timeline, it does not necessarily mean the deal will be blocked. Investors should watch for further updates from the FTC and L3Harris regarding the review process.

What is the status of the Aerojet acquisition following the shareholder vote?

Aerojet shareholders have approved all necessary proposals related to the acquisition. This is a crucial step in the closing process, demonstrating shareholder support for the transaction. However, the acquisition is still subject to regulatory approvals, including the ongoing review by the FTC, and other customary closing conditions.

LHX 8-K: Material Agreements, Financial Events & More

Summary

L3Harris Technologies, Inc. (LHX) has established new financing arrangements to support its strategic objectives. On March 10, 2023, the company entered into a $2.4 billion, 364-day senior unsecured revolving credit facility, primarily intended to finance a portion of the L3Harris acquisition of Aerojet Rocketdyne Holdings, Inc. This facility provides flexibility for borrowings and re-borrowings through its commitment termination date, with specific repayment obligations tied to the consummation of the Aerojet acquisition. Additionally, on March 14, 2023, L3Harris launched a commercial paper program allowing for up to $3.4 billion in unsecured notes, supported by its existing and new credit facilities. These financing actions coincide with significant developments in the Aerojet acquisition. L3Harris announced on March 15, 2023, that it received a request for additional information from the Federal Trade Commission regarding the acquisition. However, on March 16, 2023, Aerojet shareholders overwhelmingly approved all necessary proposals related to the acquisition, indicating progress on the shareholder approval front despite ongoing regulatory review. Investors should monitor the progress of the FTC review and the satisfaction of closing conditions for the Aerojet acquisition.

Key Highlights

1Established a new $2.4 billion, 364-day senior unsecured revolving credit facility, primarily for the Aerojet acquisition financing.
2Launched a new commercial paper program with a maximum aggregate amount of $3.4 billion, supported by existing and new credit facilities.
3The credit facility proceeds are earmarked for the Aerojet acquisition and related expenses, with subsequent use for working capital.
4Borrowings under the credit facility are subject to conditions, including repayment if the Aerojet acquisition is not completed within three business days of the initial funding.
5Interest rates on the credit facility are based on SOFR or a base rate plus an applicable margin tied to L3Harris's senior debt ratings.
6Received a request for additional information from the FTC regarding the Aerojet acquisition.
7Aerojet shareholders approved all necessary proposals related to the acquisition.

L3HARRIS TECHNOLOGIES, INC. /DE/ 8-K Report, Material Agreement (Mar 16, 2023)

Summary

Key Highlights

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