Summary
Parker-Hannifin Corporation (PH) has filed an 8-K report detailing the entry into a $800 million senior unsecured delayed-draw term loan facility. This facility, secured on May 22, 2019, with KeyBank National Association as the administrative agent, is specifically earmarked to finance the company's proposed acquisition of LORD Corporation. The loan is unsecured and not guaranteed by subsidiaries, offering flexibility but also indicating the company's financial strength to back such a debt independently. The terms of the facility allow for draws until the acquisition closes or certain other dates in early 2020, with maturity set for May 21, 2022. Interest rates will be based on either LIBOR or a Base Rate, plus a spread that varies based on the company's credit ratings. A ticking fee will also apply to undrawn commitments. The agreement includes standard covenants and events of default, with a specific Debt to Capitalization Ratio covenant that becomes more restrictive if the company's credit ratings decline.
Key Highlights
- 1Entered into an $800 million senior unsecured delayed-draw term loan facility.
- 2The facility is intended to finance the acquisition of LORD Corporation.
- 3The loan facility is unsecured and not guaranteed by any subsidiaries.
- 4Commitments under the facility terminate upon the consummation of the LORD Corporation acquisition or by early 2020.
- 5Loans mature on May 21, 2022.
- 6Interest rates are variable (LIBOR or Base Rate) plus a margin based on credit ratings.
- 7A ticking fee applies to undrawn commitments.
- 8Includes covenants related to liens and a Debt to Capitalization Ratio linked to credit ratings.