Item 1.01 Entry into a Material Definitive Agreement.
364-Day Credit Agreement
On March 31, 2021, Honeywell International Inc. ("Honeywell") entered into a
364-Day Credit Agreement (the "364-Day Credit Agreement") with the banks,
financial institutions and other institutional lenders party thereto, Bank of
America, N.A. ("Bank of America"), as administrative agent, and JPMorgan Chase
Bank, N.A. and Wells Fargo Bank, National Association, as syndication agents.
The 364-Day Credit Agreement provides for revolving credit commitments in an
aggregate principal amount of $1.5 billion and is maintained for general
corporate purposes. Amounts borrowed under the 364-Day Credit Agreement are
required to be repaid no later than March 30, 2022, unless (i) Honeywell elects
to convert all then outstanding amounts into a term loan, upon which such
amounts shall be repaid in full on March 30, 2023, or (ii) the 364-Day Credit
Agreement is terminated earlier pursuant to its terms. The 364-Day Credit
Agreement does not restrict Honeywell's ability to pay dividends, nor does it
contain financial covenants. The failure of Honeywell to comply with customary
conditions or the occurrence of customary events of default contained in the
364-Day Credit Agreement would prevent any further borrowings and would
generally require the repayment of any outstanding borrowings under the 364-Day
Credit Agreement. Such events of default include, among other things, (a)
non-payment of 364-Day Credit Agreement debt, interest or fees; (b)
non-compliance with the terms of the 364-Day Credit Agreement covenants; (c)
cross-default with other material debt in certain circumstances; (d) bankruptcy
or insolvency; and (e) defaults on certain obligations under the Employee
Retirement Income Security Act of 1974. Additionally, each of the lenders has
the right to terminate its commitment to lend additional funds under the 364-Day
Credit Agreement if any person or group acquires beneficial ownership of 30
percent or more of Honeywell's voting stock, or during any twelve-month period,
individuals who were directors of Honeywell at the beginning of the period cease
to constitute a majority of the board of directors, except to the extent
individuals who at the beginning of such twelve-month period were replaced by
individuals (x) whose election or nomination to the board of directors was
approved by a majority of remaining members of the board of directors at the
time of such election or nomination, or (y) who were nominated by a majority of
the remaining members of the board of directors at the time of such election or
nomination and subsequently elected as directors by shareowners of Honeywell.
At Honeywell's option, advances under the 364-Day Credit Agreement would be (1)
a "Base Rate Advance" denominated in U.S. Dollars and would bear interest at the
Base Rate (as defined below) plus the Applicable Margin (as described below), or
(2) an "Eurocurrency Rate Advance" denominated in U.S. Dollars or in Euros and
would bear interest at the Eurocurrency Rate (defined as LIBOR subject to a
floor of zero), plus the Applicable Margin. The Base Rate is the highest of (a)
the rate of interest announced publicly by Bank of America in New York, New
York, from time to time, as Bank of America's "prime rate", (b) the federal
funds rate (subject to a floor of zero) plus ½ of 1%, and (c) the Eurocurrency
Rate plus 1.00%. The Applicable Margin for Eurocurrency Rate Advances is based
on Honeywell's credit default swap mid-rate spread subject to a floor and cap
based on Honeywell's Public Debt Rating (as defined below). The Applicable
Margin for Base Rate Advances is 100 basis points lower than the Applicable
Margin for Eurocurrency Rate Advances, subject to a floor of 0.00%. The 364-Day
Credit Agreement contains customary LIBOR successor provisions.
Honeywell has agreed to pay a commitment fee on the aggregate amount of each
lender's unused commitment for the 364-Day Credit Agreement, based upon a grid
determined by reference to Honeywell's non-credit enhanced long-term senior
unsecured debt rating (the "Public Debt Rating"), in an amount equal to 0.020%
per annum if Honeywell's Public Debt Rating is at a level of at least AA- by
Standard & Poor's, a Standard & Poor's Financial Services LLC business
("Standard & Poor's"), or Aa3 by Moody's Investors Service, Inc. ("Moody's")
("Fee Level 1"), with a step-up to (i) 0.030% per annum if Honeywell's Public
Debt Rating is lower than Fee Level 1 but at least A+ by Standard & Poor's or A1
by Moody's ("Fee Level 2"), (ii) 0.040% per annum if Honeywell's Public Debt
Rating level is lower than Fee Level 2 but at least A by Standard & Poor's or A2
by Moody's ("Fee Level 3"), (iii) 0.050% per annum if Honeywell's Public Debt
Rating level is lower than Fee Level 3 but at least A- by Standard & Poor's or
A3 by Moody's ("Fee Level 4"), and (iv) 0.075% per annum if Honeywell's Public
Debt Rating level falls below Fee Level 4. The 364-Day Credit Agreement is not
subject to termination based upon a decrease in Honeywell's debt ratings or as a
result of a Material Adverse Change (as defined in the 364-Day Credit
Agreement).
The foregoing description of the 364-Day Credit Agreement is not intended to be
complete and is qualified in its entirety by reference to the 364-Day Credit
Agreement, a copy of which is attached hereto as Exhibit 10.1 and is
incorporated herein by reference.
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5-Year Credit Agreement
On March 31, 2021, Honeywell entered into an Amended and Restated Five Year
Credit Agreement (the "5-Year Credit Agreement") with the banks, financial
institutions, and other institutional lenders party thereto, Bank of America,
N.A., as administrative agent, Bank of America Europe Designated Activity
Company, London Branch, as swing line agent, and JPMorgan Chase Bank, N.A. and
Wells Fargo Bank, National Association, as syndication agents.
The 5-Year Credit Agreement provides for revolving credit commitments in an
aggregate principal amount of $4.0 billion and is maintained for general
corporate purposes. Commitments under the 5-Year Credit Agreement can be
increased pursuant to the terms of the 5-Year Credit Agreement to an aggregate
amount not to exceed $4.5 billion. The 5-Year Credit Agreement amends and
restates the previously reported $4.0 billion amended and restated five-year
credit agreement dated as of April 26, 2019 (the "Prior Agreement"). No
borrowings were outstanding at any time under the Prior Agreement. The 5-Year
Credit Agreement includes a sublimit for the potential issuance of
multi-currency letters of credit and a sublimit for swing line advances, in each
case in amounts equivalent to the commitments of the revolving credit lenders
thereunder.
The 5-Year Credit Agreement has substantially the same material terms and
conditions as the Prior Agreement with an extension of maturity. Any amounts
borrowed under the 5-Year Credit Agreement are required to be repaid no later
than March 31, 2026, unless such date is extended pursuant to the terms of the
5-Year Credit Agreement.
The 5-Year Credit Agreement does not restrict Honeywell's ability to pay
dividends, nor does it contain financial covenants. The failure of Honeywell to
comply with customary conditions or the occurrence of customary events of
default contained in the 5-Year Credit Agreement would prevent any further
borrowings and would generally require the repayment of any outstanding
borrowings under the 5-Year Credit Agreement. Such events of default include,
among other things, (a) non-payment of the 5-Year Credit Agreement debt,
interest or fees; (b) non-compliance with the terms of the 5-Year Credit
Agreement covenants; (c) cross-default with other material debt in certain
circumstances; (d) bankruptcy or insolvency; and (e) defaults on certain
obligations under the Employee Retirement Income Security Act of 1974.
Additionally, each of the lenders has the right to terminate its commitment to
lend additional funds or issue additional letters of credit under the 5-Year
Credit Agreement if any person or group acquires beneficial ownership of 30
percent or more of Honeywell's voting stock, or during any twelve-month period,
individuals who were directors of Honeywell at the beginning of the period cease
to constitute a majority of the board of directors, except to the extent
individuals who at the beginning of such twelve-month period were replaced by
individuals (x) whose election or nomination to the board was approved by a
majority of remaining members of the board of directors at the time of such
election or nomination, or (y) who were nominated by a majority of the remaining
members of the board of directors at the time of such election or nomination and
subsequently elected as directors by shareowners of Honeywell.
At Honeywell's option, revolving credit borrowings under the 5-Year Credit
Agreement would be (1) a "Base Rate Advance" denominated in U.S. Dollars and
would bear interest at the Base Rate (as defined below) plus the Applicable
Margin (as described below), or (2) an "Eurocurrency Rate Advance" denominated
in U.S. Dollars, Euros, Pounds Sterling or Japanese Yen and would bear interest
at the Eurocurrency Rate (defined as LIBOR subject to a floor of zero), plus the
Applicable Margin. The Base Rate is the highest of (a) the rate of interest
announced publicly by Bank of America in New York, New York, from time to time,
as Bank of America's "prime rate", (b) the federal funds rate (subject to a
floor of zero) plus ½ of 1%, and (c) the Eurocurrency Rate plus 1.00%. The
Applicable Margin for Eurocurrency Rate Advances is based on Honeywell's credit
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above regarding the 364-Day Credit
Agreement and the 5-Year Credit Agreement is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
The following exhibits are filed as part of this report:
Exhibit # Description
10.1 364-Day Credit Agreement, dated as of March 31, 2021, among
Honeywell International Inc., the banks, financial institutions,
and other institutional lenders parties thereto, Bank of America,
N.A., as administrative agent, and JPMorgan Chase Bank, N.A. and
Wells Fargo Bank, National Association, as syndication agents.
10.2 Amended and Restated Five-Year Credit Agreement, dated as of
March 31, 2021, among Honeywell International Inc., the banks,
financial institutions, and other institutional lenders parties
thereto, Bank of America, N.A., as administrative agent, Bank of
America Europe Designated Activity Company, London Branch, as swing
line agent and JPMorgan Chase Bank, N.A., and Wells Fargo Bank,
National Association, as syndication agents.
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the iXBRL document).
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