Summary
Rockwell Automation, Inc. (ROK) has entered into a new $400 million senior unsecured 364-day term loan credit agreement, which was funded on April 20, 2020. This facility is in addition to its existing undrawn $1.25 billion credit agreement and provides the company with significant liquidity. The proceeds from this new loan are earmarked for general corporate purposes, notably including financing two previously announced acquisitions: Kalypso, LP and ASEM, S.p.A. This demonstrates the company's proactive approach to funding strategic growth initiatives even amidst broader economic uncertainties. The terms of the agreement include customary covenants, such as restrictions on incurring secured indebtedness and a financial covenant requiring a minimum Consolidated EBITDA to Consolidated Interest Expense ratio of 3.00 to 1.00.
Key Highlights
- 1Secured a new $400 million senior unsecured 364-day term loan facility, effective April 20, 2020.
- 2The new facility is supplemental to an existing undrawn $1.25 billion credit agreement.
- 3Proceeds will be used for general corporate purposes, including financing two pending acquisitions (Kalypso, LP and ASEM, S.p.A.).
- 4Borrowings mature on or before April 19, 2021, providing short-term liquidity.
- 5Interest rates are based on LIBOR or a base rate plus applicable margins, with specified floor rates.
- 6The agreement includes standard covenants, such as restrictions on secured debt, mergers, and asset sales.
- 7A key financial covenant requires a Consolidated EBITDA to Consolidated Interest Expense ratio of at least 3.00x.