Summary
Rockwell Automation, Inc. (ROK) filed an 8-K on October 4, 2006, to report the execution of a material definitive agreement. Specifically, the company entered into a $250 million 364-day revolving credit agreement on September 29, 2006, with various banks, where JPMorgan Chase Bank serves as the Administrative Agent. This new credit facility is intended to provide financial flexibility for general corporate purposes, including supporting commercial paper issuance, funding potential acquisitions, and facilitating stock repurchases. The agreement allows Rockwell Automation to borrow funds at variable interest rates, offering flexibility based on prime rate, federal funds rate, or Eurodollar rates, plus applicable margins. It also includes customary covenants and restrictions, such as limitations on secured indebtedness and a debt-to-capital ratio not exceeding 60%. The filing indicates standard provisions for events of default and the potential termination or acceleration of credit by lenders under certain circumstances, such as bankruptcy or failure to meet financial covenants.
Key Highlights
- 1Rockwell Automation secured a $250 million 364-day revolving credit agreement.
- 2The credit facility was entered into on September 29, 2006.
- 3Proceeds are designated for general corporate purposes, including commercial paper backstop, acquisitions, and stock repurchases.
- 4Borrowing interest rates are variable and can be based on prime rate, federal funds rate, or Eurodollar rates.
- 5The agreement includes standard covenants and restrictions, such as a debt-to-capital ratio limit of 60%.
- 6Events of default and acceleration clauses are customary for such credit agreements.