Summary
Sherwin-Williams Company (SHW) has entered into a new five-year, $2 billion Credit Agreement effective July 19, 2018. This new agreement, maturing on July 19, 2023, replaces a previous credit facility and provides the company with flexibility for general corporate purposes, including working capital needs. It allows for potential increases up to an additional $750 million and includes provisions for letters of credit up to $250 million. The company also retains the right to request extensions of the maturity date for two additional one-year periods. This refinancing is a significant development for investors as it demonstrates continued access to substantial credit lines. The agreement includes a financial covenant limiting the consolidated leverage ratio to 4.75:1 (total indebtedness to EBITDA), with specified step-downs. The termination of the previous credit agreement was effective the same day, with no outstanding borrowings at that time, indicating a smooth transition and a proactive approach to managing its debt structure.
Key Highlights
- 1Entered into a new five-year, $2 billion Credit Agreement on July 19, 2018.
- 2The new agreement matures on July 19, 2023, with options for two one-year extensions.
- 3The facility can be used for general corporate purposes, including financing working capital.
- 4The agreement allows for an increase in the facility size by up to an additional $750 million.
- 5A sub-facility for letters of credit up to $250 million is available.
- 6The new Credit Agreement replaces a previous agreement dated July 16, 2015.
- 7A financial covenant limits the consolidated leverage ratio to 4.75:1 (Total Debt to EBITDA), with step-downs.