Summary
Rockwell Automation, Inc. (ROK) filed an 8-K on May 28, 2013, to report on the execution of a new $750,000,000 five-year unsecured revolving credit agreement, effective May 22, 2013. This new agreement replaces a previous $750,000,000 four-year credit facility that terminated concurrently without any early termination penalties. The company retains the option to increase the credit facility by an additional $250,000, subject to specific conditions. The proceeds from borrowings under this new agreement are designated for general corporate purposes, indicating flexibility in how the company intends to utilize these funds. The credit agreement features variable interest rates, including options for base rate loans and Euro-dollar loans, with margins tied to the company's credit rating. Standard covenants are in place, including restrictions on secured debt, mergers, asset sales, and a debt-to-capital ratio not exceeding 60%. The agreement also outlines customary events of default, such as bankruptcy, non-payment, covenant breaches, and change of control, which can lead to termination of commitments and acceleration of debt.
Key Highlights
- 1New $750 million, five-year unsecured revolving credit agreement entered into on May 22, 2013.
- 2The new credit facility replaces a previous $750 million, four-year agreement without incurring early termination penalties.
- 3The company has the option to increase the credit facility by up to $250 million under certain conditions.
- 4Proceeds from borrowings are intended for general corporate purposes.
- 5Borrowings will bear interest at variable rates, either base rate plus a margin or LIBOR-based Euro-dollar rate plus a margin, which is dependent on the company's credit rating.
- 6The agreement includes standard covenants restricting debt, mergers, asset sales, and a debt-to-capital ratio limit of 60%.
- 7Customary events of default are outlined, including bankruptcy and failure to meet financial covenants.