Summary
On July 8, 2011, The Sherwin-Williams Company (SHW) announced the execution of a new, five-year, $1.05 billion Credit Agreement, replacing its previous $500 million facility. This significantly larger credit line, maturing in July 2016, provides enhanced financial flexibility for general corporate purposes, including working capital and commercial paper support. The company also secured the option to increase the facility by an additional $250 million and has provisions for extending the maturity date. This move demonstrates Sherwin-Williams' proactive approach to managing its financial resources and ensuring access to capital. The replacement of the older agreement, which had no outstanding borrowings at termination, suggests a strategic decision to secure more favorable terms and a larger borrowing capacity. The new agreement maintains similar covenants to the prior one, including a consolidated leverage ratio not exceeding 3.25 to 1.0, indicating a continued commitment to financial discipline.
Key Highlights
- 1Sherwin-Williams entered into a new five-year, $1.05 billion Credit Agreement on July 8, 2011.
- 2The new agreement replaces a prior $500 million credit facility that was terminated on the same date.
- 3The company has the option to increase the new credit facility by an additional $250 million.
- 4The new Credit Agreement matures on July 8, 2016, with provisions for two one-year extension options.
- 5Funds from the new agreement are designated for general corporate purposes, including working capital and commercial paper.
- 6The prior credit agreement had no outstanding borrowings at the time of its termination.
- 7A key financial covenant requires Sherwin-Williams' consolidated leverage ratio not to exceed 3.25 to 1.0.