Item 1.01 Entry into a Material Definitive Agreement
On October 26, 2020, The Boeing Company ("Boeing") entered into a $3.1 billion,
364-day revolving credit agreement (the "364-Day Credit Agreement") with
Citigroup, N.A. ("Citibank") and JPMorgan Chase Bank, N.A. ("JPMorgan") as joint
lead arrangers and joint book managers, JPMorgan as syndication agent and
Citibank as administrative agent, and a syndicate of lenders as defined in the
364-Day Credit Agreement. This facility replaces Boeing's previous 364-day
credit agreement, which was scheduled to terminate on October 28, 2020. Boeing's
$3.2 billion three-year revolving credit agreement and $3.2 billion five-year
revolving credit agreement, each entered into in 2019, remain in effect.
Under the 364-Day Credit Agreement, Boeing will pay a fee of between 0.15% and
0.35% per annum on the commitments, depending on Boeing's credit rating.
Borrowings under the 364-Day Credit Agreement that are not based on Eurodollar
rates will bear interest at an annual rate equal to the highest of (1) the rate
announced publicly by Citibank, from time to time, as its "base" rate, (2) the
federal funds rate plus 0.50% and (3) the ICE benchmark settlement rate for US
dollars for a period of one month plus 1.00%, plus between 0.1% and 0.9% per
annum, depending on Boeing's credit rating. Borrowings under the 364-Day Credit
Agreement that are based on Eurodollar rates will generally bear interest based
on an applicable ICE benchmark settlement rate plus between 1.1% and 1.9% per
annum, depending on Boeing's credit rating. The 364-Day Credit Agreement is
scheduled to terminate on October 25, 2021, subject to Boeing's right to,
following payment of additional fees, convert outstanding borrowings into term
loans with a maturity date that is the one-year anniversary of the termination
date, as well as Boeing's right to request that the lenders extend the term for
an additional 364 days.
The 364-Day Credit Agreement contains customary terms and conditions, including
covenants restricting Boeing's ability to permit consolidated debt (as defined
in the applicable agreement) in excess of 60% of Boeing's total capital (as
defined in the applicable agreement) or to incur liens, merge or consolidate
with another entity. Events of default under the Credit Agreement include: (1)
failure to pay outstanding principal or interest within five business days of
when due, (2) determination that any representation or warranty was incorrect in
any material respect when made, (3) failure to perform any other term, covenant
or agreement, which failure is not remedied within 30 days of notice, (4) a
cross-default with other debt in certain circumstances, (5) the incurrence of
certain liabilities under the Employee Retirement Income Security Act and (6)
bankruptcy and other insolvency events. If an event of default occurs and is
continuing, the lenders would have the right to accelerate and require the
repayment of all amounts outstanding under the applicable agreement and would
not be required to advance any additional funds.
Certain of the lenders and their affiliates have performed, and may in the
future perform, for Boeing and its subsidiaries, various banking, underwriting,
and other financial services, for which they receive customary fees and
expenses.
The foregoing description is qualified in its entirety by the 364-Day Credit
Agreement, which is filed as exhibit 10.1 hereto.
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 above under "Item 1.01. Entry into a Material
Definitive Agreement" is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
10.1 364-Day Credit Agreement
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