Summary
Marsh & McLennan Companies, Inc. (MRSH) filed an 8-K on April 2, 2021, to announce the entry into a new Amended and Restated 5 Year Credit Agreement. This new facility provides the company with a substantial multi-currency unsecured revolving credit facility of $2.8 billion, extending for five years and maturing in April 2026. This significantly increases the company's available liquidity compared to its previous credit arrangements. In conjunction with establishing the New Facility, the Company terminated its prior $1.8 billion five-year revolving credit facility and its $1 billion 364-day revolving credit facility. The new credit agreement includes covenants related to coverage and leverage ratios, which will be tested quarterly, and incorporates provisions for transitioning away from LIBOR. Investors should view this as a positive move, indicating strong financial positioning and enhanced flexibility for future operations and strategic initiatives.
Key Highlights
- 1Marsh & McLennan Companies, Inc. entered into a new 5-year unsecured revolving credit facility totaling $2.8 billion.
- 2The new credit facility matures in April 2026, providing long-term liquidity.
- 3The interest rate on the new facility is based on LIBOR plus a margin that varies with the company's credit ratings.
- 4The company terminated its previous $1.8 billion 5-year revolving credit facility and a $1 billion 364-day revolving credit facility.
- 5The new credit agreement requires the company to maintain certain coverage and leverage ratios, tested quarterly.
- 6The agreement includes provisions for a LIBOR successor rate, addressing future rate environment changes.