Item 1.01. Entry into a Material Definitive Agreement.
OnAugust 18, 2021 ,Cummins Inc. (the "Company") entered into an Amended and Restated Credit Agreement (the "5-Year Credit Agreement") by and among the Company, certain of its subsidiaries (together with the Company, the "Borrowers"), the lenders named therein (the "5-Year Lenders") andJPMorgan Chase Bank, N.A . ("JPMorgan"), as administrative agent. Under the 5-Year Credit Agreement, which will mature onAugust 18, 2026 (the "Maturity Date"), the Borrowers may obtain revolving and swingline loans and letters of credit, in each case subject to certain amount limitations, in an amount up to$2.0 billion in the aggregate outstanding at any time prior to the Maturity Date. The 5-Year Credit Agreement amends and restates in its entirety that certain Credit Agreement, dated as ofAugust 22, 2018 , by and among the Company, certain subsidiaries referred to therein, the lenders party thereto and JPMorgan, as administrative agent. OnAugust 18, 2021 , the Company also entered into a Third Amended and Restated 364-Day Credit Agreement (the "364-Day Credit Agreement," together with the 5-Year Credit Agreement, the "Credit Agreements") by and among the Company, the other Borrowers party thereto, the lenders named therein (the "364-Day Lenders ," together with the 5-Year Lenders, the "Lenders") and JPMorgan, as administrative agent. Under the 364-Day Credit Agreement, the Borrowers may obtain revolving and swingline loans, in each case subject to certain amount limitations, in an amount up to$1.5 billion in the aggregate outstanding at any time prior toAugust 17, 2022 (the "Commitment Termination Date"). The 364-Day Credit Agreement amends and restates in its entirety that certain Second Amended and Restated 364-Day Credit Agreement, dated as ofAugust 19, 2020 , by and among the Company, certain subsidiaries referred to therein, the lenders party thereto and JPMorgan, as administrative agent. The borrowings under the Credit Agreements will not be secured with liens on any of the Company's or its subsidiaries' assets. The Company will guarantee all borrowings by the subsidiary Borrowers under the Credit Agreements. The Company may from time to time (a) request incremental term loans and/or increase the maximum availability under the 364-Day Credit Agreement by up to$750 million and (b) request incremental term loans and/or increase the maximum availability under the 5-Year Credit Agreement by up to$1.0 billion , in each case if certain conditions are satisfied, including (i) the absence of any default or event of default under the applicable Credit Agreement, and (ii) the Company obtaining the consent of the Lenders participating in each such increase. In addition, prior to the Commitment Termination Date, the Company may, by notice to the administrative agent and subject to certain other conditions set forth in the 364-Day Credit Agreement including the absence of any default or event of default thereunder, elect to convert all or a ratable portion of the outstanding revolving loans under the 364-Day Credit Agreement into term loans (the "Term-Out Option") that will mature on the first anniversary of the Commitment Termination Date. The Borrowers will pay a fee to the 364-Day Lenders equal to 0.5% of the aggregate principal amount of the outstanding revolving loans converted into term loans pursuant to the Term-Out Option. Borrowings under the Credit Agreements will bear interest at varying rates, depending on the type of loan and, in some cases, the rates of designated benchmarks and the applicable Borrower's election. For all borrowings under the Credit Agreements, the applicable Borrower may choose among the following interest rates: (i) solely in the case ofU.S. dollar-denominated loans, an interest rate equal to the highest of (1) the prime rate in effect from time to time, (2) the greater of (A) the federal funds effective rate in effect from time to time and (B) the overnight bank funding rate in effect from time to time, in each case plus 0.5% and (3) the Adjusted LIBO Rate for a one month interest period inU.S. dollars plus 1.00%; (ii) an interest rate equal to (1) solely in the case ofU.S. dollar-denominated eurocurrency loans, the Adjusted LIBO Rate or (2) solely in the case of euro-denominated eurocurrency loans, the Adjusted EURIBO Rate, as applicable, in each case for the applicable interest period plus a rate ranging from 0.50% to 1.00% depending on the credit rating of the Company's senior unsecured long-term debt (the "Applicable Rate"); (iii) solely in the case of pound sterling-denominated loans, an interest rate equal to the Daily Simple RFR plus the Applicable Rate; or (iv) solely in the case of swingline loans, another rate agreed to by the applicable Lender and the applicable Borrower. The Adjusted LIBO Rate and the Adjusted EURIBO Rate are rates determined by reference to the rate payable on deposits in the relevant currency in theLondon interbank market and theEurozone interbank market, respectively. Daily Simple RFR is a rate determined by reference to the average interbank rate payable on eligible deposits in pound sterling. Currently, the Company's senior unsecured long-term debt is rated A2 by Moody's Investors Service, Inc. and A+ byStandard & Poor's Financial Services LLC , which would result in an Applicable Rate of 0.75% for purposes of (ii) and (iii) above. Credit ratings are not recommendations to buy and are subject to change, and each rating should be evaluated independently of any other rating. In addition, the Company undertakes no obligation to update disclosures concerning its credit ratings, whether as a result of new information, future events or otherwise. The Credit Agreements contain customary events of default and financial and other covenants, including a financial covenant requiring that the ratio of the consolidated net debt of the Company and its subsidiaries to the consolidated total capital of the Company and its subsidiaries as of the last day of each fiscal quarter not be greater than 0.65:1. The description of each Credit Agreement set forth above is qualified by reference to the 364-Day Credit Agreement and the 5-Year Credit Agreement, as applicable, filed herewith as Exhibits 10.1 and 10.2, respectively, 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.
The information included in Item 1.01 above is incorporated herein by reference.
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