Summary
Northrop Grumman Corporation (NOC) filed an 8-K on July 9, 2015, to announce the entry into a new five-year senior unsecured revolving credit facility. This facility has an aggregate principal amount of $1.6 billion, replacing the company's existing $1.775 billion facility. The new agreement, effective July 8, 2015, includes standard covenants restricting asset sales, mergers, and fundamental changes, and sets a maximum consolidated debt to capitalization ratio of 65%.
Key Highlights
- 1Northrop Grumman entered into a new five-year senior unsecured revolving credit facility totaling $1.6 billion.
- 2This new facility amends and restates the company's prior $1.775 billion revolving credit facility from August 29, 2013.
- 3The agreement includes customary covenants related to fundamental business changes and liens.
- 4A key financial covenant restricts consolidated debt to capitalization from exceeding 65%.
- 5Northrop Grumman Systems Corporation, a subsidiary, will act as a guarantor for the credit facility.
- 6The credit agreement contains standard events of default, including non-payment, breach of representations, cross-defaults, and bankruptcy.
Frequently Asked Questions
The primary purpose of this 8-K filing is to announce Northrop Grumman's entry into a new, amended and restated five-year senior unsecured revolving credit facility valued at $1.6 billion.
The new credit facility has a principal amount of $1.6 billion, which is a reduction from the previous $1.775 billion facility entered into on August 29, 2013. The new agreement is for a five-year term.
The agreement includes standard covenants that restrict the company's ability to sell substantially all assets, merge or consolidate, and incur liens. A key financial covenant limits the consolidated debt to capitalization ratio to 65%.
Northrop Grumman Corporation is the borrower, Northrop Grumman Systems Corporation is the guarantor, JPMorgan Chase Bank, N.A. is the administrative agent, and various lenders are parties to the agreement.