Summary
Phillips 66 (PSX) announced on March 24, 2020, a significant business update in response to the prevailing business environment. The company has secured a $1 billion 364-day delayed draw term loan facility with Mizuho Bank, Ltd. This facility was fully drawn on March 24, 2020, providing immediate liquidity. The company also retains the option to increase this facility by an additional $1 billion, subject to certain conditions, potentially totaling $2 billion. In conjunction with securing this financing, Phillips 66 is implementing cost-saving measures. These include reducing expected 2020 capital expenditures, lowering operating and administrative costs for 2020, and temporarily suspending its share repurchase program. These actions underscore the company's proactive approach to navigating economic uncertainty and preserving financial flexibility.
Key Highlights
- 1Secured a $1 billion 364-day delayed draw term loan facility with Mizuho Bank, Ltd.
- 2Fully drew the $1 billion facility on March 24, 2020, enhancing liquidity.
- 3Retains the option to increase the total facility size to $2 billion.
- 4Reducing expected 2020 capital spending.
- 5Implementing reductions in operating and administrative costs for 2020.
- 6Temporarily suspending share repurchase program to conserve cash.