8-KMaterial AgreementsFinancial EventsExhibits & Filings

SHERWIN WILLIAMS CO 8-K Report, Material Agreement (Jul 20, 2018)

Filed July 20, 2018For Securities:SHW

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.

Frequently Asked Questions

The new Credit Agreement is for general corporate purposes, which includes financing working capital requirements. It provides Sherwin-Williams with a significant source of funds and financial flexibility.

The new Credit Agreement is for $2 billion and has a five-year term, maturing on July 19, 2023. The company also has the option to request two one-year extensions.

Yes, the agreement includes a financial covenant that limits Sherwin-Williams’ consolidated leverage ratio (total indebtedness to EBITDA) to not exceed 4.75:1 as of the last day of any fiscal quarter, with provisions for step-downs.

This report indicates the new agreement has been entered into and the previous one terminated. While it states the previous agreement had no outstanding borrowings at termination, it does not specify if any amounts have been drawn on the new $2 billion facility as of the filing date.