Summary
Northrop Grumman Corporation (NOC) announced the entry into a new five-year senior unsecured credit facility totaling $1.775 billion on August 29, 2013. This new facility replaces the company's existing $1.5 billion five-year revolving credit facility and a $0.5 billion 364-day revolving credit facility. The new credit agreement provides enhanced liquidity and a longer maturity profile, which is a positive development for financial flexibility and operational planning. The termination of the prior facilities occurred without any outstanding borrowings or termination penalties, indicating a smooth transition and efficient management of existing debt obligations. The credit agreement includes customary covenants and events of default, such as a maximum debt-to-capitalization ratio of 65 percent and cross-default provisions, which are standard for such financing arrangements and aim to maintain the company's financial health and creditworthiness.
Key Highlights
- 1Northrop Grumman entered into a new $1.775 billion senior unsecured credit facility on August 29, 2013.
- 2The new facility has a five-year term, providing extended financial flexibility.
- 3This new credit agreement replaces two previous facilities totaling $2.0 billion ($1.5 billion 5-year and $0.5 billion 364-day).
- 4The company experienced no outstanding borrowings under the prior facilities at the time of termination.
- 5No termination penalties were incurred upon the cancellation of the previous credit agreements.
- 6The new credit agreement includes a covenant restricting consolidated debt to capitalization ratio to a maximum of 65 percent.
- 7Customary covenants and events of default are included, such as non-payment, material misrepresentation, failure to observe agreements, cross-defaults, bankruptcy, ERISA events, and change of control.