Item 1.01 Entry into a Material Definitive Agreement
On September 3, 2020 Caterpillar Inc. ("Caterpillar") entered into a Credit
Agreement (the "364-Day Facility") among Caterpillar and Caterpillar Financial
Services Corporation ("Cat Financial"), Caterpillar International Finance
Designated Activity Company ("CIF") and Caterpillar Finance Kabushiki Kaisha
("CFKK" and, together with Caterpillar, Cat Financial and CIF, the "Borrowers"),
certain financial institutions named therein (the "Banks"), Citibank, N.A. (the
"Agent"), Citibank Europe PLC, UK Branch (the "Local Currency Agent") and MUFG
Bank, Ltd. (the "Japan Local Currency Agent"), which provides an unsecured
revolving credit facility to the Borrowers in an aggregate amount of up to $3.15
billion (the "364-Day Aggregate Commitment") that expires on September 2, 2021.
In addition, on September 3, 2020, Cat Financial, CIF, Local Currency Banks (as
defined in the 364-Day Facility), the Agent and the Local Currency Agent,
entered into a Local Currency Addendum that enables CIF to borrow in certain
approved currencies including Pounds Sterling and Euros in an aggregate amount
up to the equivalent of $100 million, and Cat Financial, CFKK, the Japan Local
Currency Banks (as defined in the 364-Day Facility), the Agent and the Japan
Local Currency Agent entered into a Japan Local Currency Addendum that enables
CFKK to borrow Japanese Yen in an aggregate amount up to the equivalent of $100
million, as part of the 364-Day Aggregate Commitment. The 364-Day Facility
replaces Caterpillar's prior 364-Day Facility, which was entered into on
September 5, 2019.
The 364-Day Facility is available for general corporate purposes. As of the date
hereof, the Borrowers have not drawn on the 364-Day Facility.
The 364-Day Facility contains certain representations and warranties, covenants
and events of default, including financial covenants. Under the 364-Day
Facility, Caterpillar is required to maintain consolidated net worth not less
than $9 billion at all times. Caterpillar's consolidated net worth is defined as
the consolidated stockholder's equity including preferred stock but excluding
the pension and other post-retirement benefits balance within Accumulated other
comprehensive income (loss). Cat Financial is required to maintain an interest
coverage ratio above 1.15 to 1, where the interest coverage ratio is defined as
the ratio of (1) profit excluding income taxes, interest expense and net
gain/(loss) from interest rate derivatives to (2) interest expense, calculated
at the end of each calendar quarter for the rolling four quarter period then
most recently ended. Cat Financial is also required to maintain a leverage ratio
(consolidated debt to consolidated net worth) not greater than 10.0 to 1,
calculated (1) on a monthly basis as the average of the leverage ratios
determined on the last day of each of the six preceding calendar months and
(2) on each December 31. Drawings under the 364-Day Facility are also subject to
conditions precedent and the payment of certain facility fees.
Certain of the lenders and agents party to the 364-Day Facility, as well as
certain of their respective affiliates, have performed, and may in the future
perform, for Caterpillar and its subsidiaries, various commercial banking,
investment banking, underwriting and other financial advisory services, for
which they have received and may in the future receive customary fees and
expenses.
The foregoing description is qualified in its entirety by the terms and
provisions of the 364-Day Facility, the Local Currency Addendum and Japan Local
Currency Addendum which are filed as an exhibit to this report and incorporated
herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet
Arrangement of a Registrant
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The information set forth under Item 1.01 of this report is hereby incorporated
in this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
Number Description
10.1 364-Day Facility
10.2 Local Currency Addendum to 364-Day Facility
10.3 Japan Local Currency Addendum to 364-Day Facility
The cover page from this Current Report on Form 8-K, formatted in
104 Inline XBRL.
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