| Item 1.01. | Entry into a Material Definitive Agreement. |
On March 19, 2021, The Boeing Company (“Boeing”) entered into a $5.28 billion, two-year revolving credit agreement (the “Credit Agreement”) with Citigroup, N.A. (“Citibank”), JPMorgan Chase Bank, N.A. (“JPMorgan”), BofA Securities, Inc. and Wells Fargo Securities, LLC as joint lead arrangers and joint book managers, JPMorgan as syndication agent, Citibank as administrative agent, Bank of America, N.A. and Wells Fargo Bank, National Association as documentation agents, and a syndicate of lenders as defined in the Credit Agreement.
Under the Credit Agreement, Boeing will pay a fee between 0.200% and 0.500% per annum on the commitments, depending on Boeing’s credit rating. Borrowings under the Credit Agreement that are not based on Eurodollar rates will generally 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%, in each case plus between 0.300% and 1.000% per annum, depending on Boeing’s credit rating. Borrowings under the Credit Agreement that are based on Eurodollar rates will generally bear interest based on an applicable ICE benchmark settlement rate plus between 1.300% and 2.000% per annum, depending on Boeing’s credit rating. The Credit Agreement is scheduled to terminate on March 19, 2023.
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, 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 Credit 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 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 | | Credit Agreement |
| |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
