Item 1.01. Entry into a Material Definitive Agreement
On November 10, 2022, 3M Company entered into a $1.25 billion 364-day credit
agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A. as
administrative agent, Citibank, N.A. as syndication agent, Deutsche Bank
Securities Inc. and Bank of America, N.A. as documentation agents, and a
syndicate of lenders as defined in the Credit Agreement.
Under the Credit Agreement, 3M pays a commitment fee of 0.025% per annum on the
unused commitments. Advances denominated in U.S. Dollars carry, at 3M's option,
either the "base rate" of interest in effect plus the applicable margin, or (i)
with respect to advances denominated in U.S. dollars, the "adjusted term SOFR
rate" (which is the sum of the "term SOFR rate" plus 0.10%), and (ii) with
respect to advances denominated in Euros, the "EURIBO rate" plus, in each of the
foregoing clauses (i) and (ii), the applicable margin. The "base rate" of
interest is the highest of (i) the Prime Rate as published in the Wall Street
Journal, (ii) the Federal funds rate (but not less than 0%) plus 0.50%, or (iii)
the "adjusted term SOFR rate" for one month (but not less than 0%) plus 1.00%.
The applicable margin for advances bearing interest by reference to "adjusted
term SOFR rate" or "EURIBO rate" is 0.75% per annum. The applicable margin for
"base rate" advances is 0.00% per annum.
The Credit Agreement contains a provision under which 3M may, upon notice and
payment of a fee equal to 0.50% of the principal amount of advances then
outstanding, convert any advances outstanding on the maturity date into a term
loan having a maturity one year later.
The Credit Agreement contains customary representations, warranties and
covenants, including but not limited to covenants restricting 3M's ability to
incur certain liens or to merge or consolidate with another entity where 3M is
not the surviving entity. Further, it contains a covenant requiring 3M to
maintain an EBITDA to Interest Ratio as of the end of each quarter at not less
than 3.0 to 1. This is calculated as the ratio of consolidated EBITDA for the
four consecutive quarters then ended to interest payable on all funded debt for
the same period.
The full terms and conditions of the credit facility are set forth in the Credit
Agreement. A copy of the Credit Agreement is filed as Exhibit 10.1 hereto and is
incorporated by reference herein.
Some of the lenders named under the Credit Agreement and their affiliates have
various relationships with 3M and its subsidiaries involving the provision of
financial services, including cash management, investment banking, foreign
exchange and trust services.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant
The information described above under "Item 1.01. Entry into a Material
Definitive Agreement" with respect to the Credit Agreement is hereby
incorporated by reference.
Item 8.01. Other Events
3M Company entered into Amendment No. 1, effective as of November 10, 2022, with
JPMorgan Chase Bank, N.A., as administrative agent for the Banks as defined in
the Amended and Restated Five-Year Credit Agreement, dated as of November 15,
2019 (the "Five-Year Credit Agreement"), to incorporate a successor rate to the
LIBO Base Rate. The successor rate includes the "adjusted term SOFR rate" for
advances denominated in U.S. dollars and the "EURIBO rate" for advances
denominated in Euros.
A copy of Amendment No. 1 to the Five-Year Credit Agreement is filed as Exhibit
10.2 hereto and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits
Exhibit Number Description of Exhibits
10.1 364-Day Credit Agreement dated as of November 10, 2022
10.2 Amendment No. 1 (effective as of November 10, 2022) to the Amended and
Restated Five-Year Credit Agreement dated as of November 15, 2019
104 Cover Page Interactive Data File (the cover
page XBRL tags are embedded in
the Inline XBRL document).
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