Item 1.01. Entry into a Material Definitive Agreement.
The information described below under “Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.” is hereby incorporated by reference into this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
In connection with entry into the Five-Year Revolving Credit Agreement described below under under “Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.”, we terminated our $4.5 billion amended and restated five-year revolving credit agreement, dated as of October 14, 2016.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
364-Day Revolving Credit Agreement.
On February 27, 2019, we entered into a revolving credit agreement (the“364-Day Revolving Credit Agreement”) for a364-day senior unsecured revolving credit facility in an aggregate principal amount of $1.5 billion with the lenders named in the364-Day Revolving Credit Agreement; and JPMorgan Chase Bank, N.A. as administrative agent.
Under the364-Day Revolving Credit Agreement, we and certain of our subsidiaries that we may designate may borrow up to the aggregate amount of the unused commitments under the364-Day Revolving Credit Agreement. The364-Day Revolving Credit Agreement will terminate on February 26, 2020 (the “Termination Date”). We may extend the maturity of any loans outstanding on the Termination Date to February 25, 2021, subject to delivery of prior notice and satisfaction of other conditions. We also have the right, subject to certain conditions, to terminate in whole or reduce ratably in part the unused portions of the respective commitments of the lenders. All committed pro rata borrowings under the364-Day Revolving Credit Agreement will bear interest at a variable annual rate based on LIBOR or base rate, at our election, plus an applicable margin (as determined pursuant to the364-Day Revolving Credit Agreement). The applicable margin will be determined by reference to the rating of our long-term senior unsecured debt.
The364-Day Revolving Credit Agreement requires us to maintain a minimum shareholders’ equity of not less than $24.6 billion. The364-Day Revolving Credit Agreement’s definition of minimum shareholder equity excludes accumulated other comprehensive income or losses, the cumulative effects of any changes in accounting principles, and any income or losses recognized in connection with the ongoing application of any“mark-to-market” accounting adopted in respect of pension and other retirement plans. The364-Day Revolving Credit Agreement also contains customary representations, covenants and events of default.
We expect to use the364-Day Revolving Credit Agreement for general corporate purposes, including for working capital purposes, and to support our commercial paper program. Some of the lenders under the364-Day Revolving Credit Agreement and their affiliates have various relationships with us and our subsidiaries involving the provision of financial services, including cash management, investment banking and trust services. In addition, we and certain of our subsidiaries have entered into foreign exchange and other derivatives arrangements with certain of the lenders and their affiliates.
This description of the364-Day Revolving Credit Agreement is qualified in its entirety by reference to the complete terms and conditions of the364-Day Revolving Credit Agreement, which is filed hereto as Exhibit 10.1.
Five-Year Revolving Credit Agreement.
On February 27, 2019, we entered into a revolving credit agreement (the “Five-Year Revolving Credit Agreement”) for a five-year senior unsecured revolving credit facility in an aggregate principal amount of $4.5 billion with the lenders named in the Five-Year Revolving Credit Agreement; and JPMorgan Chase Bank, N.A. as administrative agent. The Five-Year Revolving Credit Agreement replaces our $4.5 billion amended and restated five-year revolving credit agreement, dated as of October 14, 2016.
Under the Five-Year Revolving Credit Agreement, we and certain of our subsidiaries that we may designate may borrow advances up to the aggregate amount of the unused commitments under the revolving facility on or after February 27, 2019 and before the termination of the Five-Year Revolving Credit Agreement. Under the Five-Year Revolving Credit Agreement, we guarantee the obligations of any subsidiary borrower. We may request the amount of the revolving facility be increased by up to $500 million in the aggregate with the agreement of the lenders providing the increased commitments. Unless
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