Summary
Rockwell Automation, Inc. (ROK) has entered into a new $1.5 billion, five-year unsecured revolving credit agreement, effective June 29, 2022. This new agreement replaces a previous $1.25 billion credit facility and was terminated early without any penalties. The Company has the flexibility to increase the credit line by an additional $750 million and to request two one-year extensions on the maturity date, subject to lender approval. Proceeds from this revolving credit facility are designated for general corporate purposes, providing Rockwell Automation with enhanced financial flexibility and liquidity. The agreement includes standard covenants, such as restrictions on incurring secured debt and maintaining a minimum Consolidated EBITDA to Consolidated Interest Expense ratio of 3.00 to 1.00. The interest rates are tied to the base rate or SOFR, with margins determined by the Company's long-term debt ratings, indicating a link between financial performance and borrowing costs.
Key Highlights
- 1Entered into a new $1.5 billion, five-year unsecured revolving credit agreement on June 29, 2022.
- 2The new agreement replaces a prior $1.25 billion credit facility, which was terminated early without penalty.
- 3Flexibility to increase the credit commitment by up to $750 million.
- 4Options to extend the maturity date for an additional year, twice, subject to lender consent.
- 5Proceeds are for general corporate purposes, enhancing liquidity and financial flexibility.
- 6Interest rates are variable, based on base rate or SOFR, with margins tied to the Company's debt ratings.
- 7Includes customary covenants, such as a minimum leverage ratio (Consolidated EBITDA to Consolidated Interest Expense) of 3.00 to 1.00.