Summary
Parker-Hannifin Corporation (PH) announced the entry into a new $925 million senior unsecured delayed-draw term loan facility. This facility is specifically earmarked to finance the company's proposed acquisition of EMFCO Holdings Incorporated, as previously disclosed. The loan facility has a commitment termination date aligned with the acquisition's consummation or July 26, 2020, whichever comes first. Interest rates will be based on LIBOR Fixed Rate or Base Rate, plus an applicable margin, and the company will pay a ticking fee on undrawn commitments. In addition to the new facility, Parker-Hannifin also entered into a First Amendment to its existing credit agreement. This amendment modifies the Debt to Capitalization Ratio covenant, setting a maximum ratio of 0.65 to 1.00 if the company cannot maintain certain specified credit ratings. These actions indicate proactive financing arrangements to support strategic growth initiatives and demonstrate the company's commitment to managing its capital structure effectively.
Key Highlights
- 1Entry into a new $925 million senior unsecured delayed-draw term loan facility.
- 2The term loan is intended to finance the acquisition of EMFCO Holdings Incorporated.
- 3Commitments for the new facility terminate upon acquisition consummation, valid termination of obligations, July 26, 2020, or early termination.
- 4Loan interest rates are variable, based on LIBOR Fixed Rate or Base Rate plus an applicable margin.
- 5A ticking fee will be charged on undrawn commitments for the new term loan facility.
- 6Amendment to existing credit agreement adjusts the Debt to Capitalization Ratio covenant to 0.65:1.00 if certain credit ratings are not maintained.
- 7The new credit agreement includes customary representations, covenants, and events of default, with limitations on liens and leverage.