The Boeing Company
10/15/2024 | Press release | Distributed by Public on 10/15/2024 04:23
Material Agreement Form 8 K
Item 1.01 Entry into a Material Definitive Agreement
On October 14, 2024, The Boeing Company ("Boeing") entered into a $10.0 billion supplemental credit agreement (the "Credit Agreement") with BofA Securities, Inc. ("BofA"), Citibank, N.A. ("Citibank"), Goldman Sachs Lending Partners LLC ("Goldman") and JPMorgan Chase Bank, N.A. ("JPMorgan") as joint lead arrangers and joint book managers, Citibank as administrative agent and BofA, Goldman and JPMorgan as co-syndication agents, and a syndicate of lenders as defined in the Credit Agreement.
Under the Credit Agreement, Boeing will pay a funding fee of 0.50% of the aggregate principal amount of each advance made under the Credit Agreement. Under the Credit Agreement, Boeing will also pay a duration fee between 0.50% and 1.00% of the aggregate amount of outstanding advances and unused commitments under the Credit Agreement, which shall be payable 90 to 270 days after the closing date, as applicable. Borrowings under the Credit Agreement that are not based on the secured overnight funding rate ("SOFR") 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) Adjusted Term SOFR (as defined in the Credit Agreement) for a period of one month plus 1.00%, in each case plus between 0.375% and 1.00%, depending on Boeing's credit rating. Borrowings under the Credit Agreement that are based on SOFR will generally bear interest based on Adjusted Term SOFR (as defined in the Credit Agreement) plus between 1.375% and 2.00%, depending on Boeing's credit rating. Commitments under the Credit Agreement are scheduled to terminate 120 days after the date of the Credit Agreement and any outstanding advances mature 364 days after the date of the Credit Agreement.
The Credit Agreement contains customary terms and conditions, including covenants restricting Boeing's ability to permit consolidated debt (as defined in the Credit Agreement) in excess of 60% of Boeing's total capital (as defined in the Credit Agreement) or to incur liens in excess of $250 million or merge or consolidate with another entity unless Boeing is the surviving 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. The Credit Agreement contains prepayment events that require Boeing to prepay outstanding advances or reduce the commitments if Boeing has any debt incurrence, equity issuance or disposition of assets, subject to customary terms and conditions set forth in the Credit Agreement.
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 Credit Agreement, which is filed as Exhibit 10.1 hereto.