Summary
Rockwell Automation, Inc. (ROK) has filed an 8-K report detailing the entry into a new $300,000,000 unsecured revolving 364-day credit agreement, effective March 15, 2010. This new agreement replaces a similar $267,500,000 facility that matured on the same date. The company also maintains an existing three-year $267,500,000 unsecured revolving credit agreement. The primary purpose of the new facility is to provide funding for general corporate purposes, including serving as a backstop for commercial paper. This refinancing demonstrates Rockwell Automation's proactive approach to managing its liquidity and debt structure. The new credit agreement includes a term-out option allowing the company to convert borrowings into a one-year term loan on March 14, 2011, with a 1% fee. The covenants and default provisions remain substantially similar to the previous agreement, including a debt-to-capital ratio limit of 60%. Investors should note the increased borrowing capacity and the continued reliance on flexible credit facilities for operational needs.
Key Highlights
- 1Rockwell Automation entered into a new $300 million unsecured revolving 364-day credit agreement, replacing a $267.5 million facility.
- 2The new agreement was effective March 15, 2010, and matures by its terms on March 14, 2011.
- 3Proceeds from the new credit facility are designated for general corporate purposes, including commercial paper backstop.
- 4The company also has an existing $267.5 million three-year unsecured revolving credit agreement that remains in effect.
- 5A 'term-out' option allows for conversion of borrowings into a one-year term loan on March 14, 2011, subject to a 1% fee.
- 6Interest rates are variable, based on either a base rate or a euro-dollar rate, influenced by the company's credit rating and market indicators like the CDX Index.
- 7Key covenants include restrictions on secured debt, mergers, asset sales, and a debt-to-capital ratio not exceeding 60%.