Summary
TE Connectivity plc (TEL) has announced the execution of a $1.5 billion 364-Day Senior Credit Agreement, effective March 14, 2025. This facility is primarily intended to back borrowings under the company's commercial paper program, providing a crucial liquidity backstop. The agreement involves TE Connectivity plc as the parent guarantor, TE Connectivity Switzerland Ltd. as an intermediate guarantor, and Tyco Electronics Group S.A. (TEGSA) as the borrower, with Bank of America, N.A. serving as the administrative agent. The facility matures on March 13, 2026, with an option for TEGSA to extend it for an additional year, offering flexibility in its short-to-medium term financing strategy. Key terms of the Credit Agreement include a financial covenant tied to the ratio of Consolidated Total Debt to Consolidated EBITDA, which must not exceed 3.75 to 1.0 to avoid triggering an Event of Default. Interest rates are based on either Term SOFR or an alternate base rate, plus an applicable margin determined by TEGSA's senior, unsecured, long-term debt rating. A facility fee also applies, ranging from 3.0 to 9.0 basis points. This disclosure indicates proactive management of the company's capital structure and liquidity needs.
Key Highlights
- 1TE Connectivity plc (TEL) secured a new $1.5 billion 364-Day Senior Credit Agreement.
- 2The primary purpose of the credit facility is to serve as a backstop for its commercial paper program.
- 3The agreement involves TE Connectivity plc (parent guarantor), TE Connectivity Switzerland Ltd. (intermediate guarantor), and Tyco Electronics Group S.A. (borrower).
- 4Bank of America, N.A. is the administrative agent for the 364-Day Facility.
- 5The credit facility matures on March 13, 2026, with a one-year extension option available.
- 6A key financial covenant requires the ratio of Consolidated Total Debt to Consolidated EBITDA to remain below 3.75:1.0.
- 7Borrowings will bear interest based on Term SOFR or an alternate base rate, plus a margin tied to TEGSA's debt rating.