Summary
This Form 8-K filing by The Travelers Companies, Inc. (TRV) on June 15, 2010, details the entry into a new $1.0 billion three-year revolving credit agreement, effective June 10, 2010. This new facility replaces an existing $1.0 billion five-year agreement and provides the company with significant liquidity for general corporate purposes. The agreement includes provisions for potential up to a $1.5 billion increase, subject to lender consent. The credit agreement also outlines key financial covenants designed to maintain the company's financial health. These include maintaining a minimum consolidated net worth relative to goodwill and intangible assets, and a maximum debt-to-net worth ratio. These covenants are important indicators of financial stability and operational flexibility for investors.
Key Highlights
- 1The Travelers Companies, Inc. entered into a new $1.0 billion three-year revolving credit agreement on June 10, 2010.
- 2This new credit facility replaces a previous $1.0 billion five-year agreement.
- 3The credit agreement has an expiration date of June 10, 2013, with an option for extension.
- 4The company has the option to increase the credit facility to a maximum of $1.5 billion, subject to lender approval.
- 5Borrowings under the agreement are designated for general corporate purposes.
- 6Key financial covenants include maintaining a minimum consolidated net worth over goodwill/intangibles and a maximum debt-to-net worth ratio.
- 7Interest rates on borrowings are variable, based on base rate or Eurodollar rate plus specified margins.