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.
5-Year Credit Agreement
On March 20, 2023, 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, N.A., 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 March 24, 2022 (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 20, 2028, 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 50 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), (2) a “Term Rate Advance”, (i) if denominated in U.S. Dollars, a “Term SOFR Advance” that would bear interest at Term SOFR (as defined above) and (ii) if denominated in Euros or Japanese Yen, an “Alternative Currency Term Rate Advance” that would bear interest at the applicable Alternative Currency Term Rate (defined as (x) EURIBOR in the case of Alternative Currency Term Rate Advances denominated in Euros and (y) TIBOR in the case of Alternative Currency Term Rate Advances denominated in Japanese Yen, and in each case, subject to a floor of zero), and in each case, plus the Applicable Margin or (3) a “Alternative Currency Daily Rate Advance” denominated in Pounds Sterling and would bear interest at the Alternative Currency Daily Rate (defined as SONIA plus 0.0326% per annum 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 1/2 of 1%, and (c) Term SOFR 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 a cap based on
