Item 1.01 Entry into a Material Definitive Agreement
Creation of Revolving Credit Facilities
On September 1, 2022, Caterpillar Inc. (“Caterpillar”) entered into a Credit Agreement (the “364-Day Facility”) among Caterpillar, Caterpillar Financial Services Corporation (“Cat Financial”), Caterpillar International Finance Designated Activity Company (“CIF”) and Caterpillar Finance Kabushiki Kaisha (“CFKK” and, together with Caterpillar, Cat Financial and CIF, the “Borrowers”), certain financial institutions named therein (the “Banks”), Citibank, N.A. (the “Agent”), Citibank Europe PLC, UK Branch (the “Local Currency Agent”), and MUFG Bank, Ltd. (the “Japan Local Currency Agent”), which provides an unsecured revolving credit facility to the Borrowers in an aggregate amount of up to $3.15 billion (the “364-Day Aggregate Commitment”) that expires on August 31, 2023. In addition, on September 1, 2022, Cat Financial, CIF, Local Currency Banks (as defined in the 364-Day Facility), the Agent and the Local Currency Agent, entered into a Local Currency Addendum that enables CIF to borrow in certain approved currencies including Pounds Sterling and Euros in an aggregate amount up to the equivalent of $100 million, and Cat Financial, CFKK, the Japan Local Currency Banks (as defined in the 364-Day Facility), the Agent and the Japan Local Currency Agent entered into a Japan Local Currency Addendum that enables CFKK to borrow Japanese Yen in an aggregate amount up to the equivalent of $100 million, as part of the 364-Day Aggregate Commitment. The 364-Day Facility replaces Caterpillar’s prior 364-Day Facility, which was entered into on September 2, 2021.
Amendments to and Extensions of Existing Credit Agreements
On September 1, 2022, Caterpillar entered into (i) a Third Amended and Restated Credit Agreement (Three-Year Facility), Local Currency Addendum and Japan Local Currency Addendum, each dated September 1, 2022 (collectively, the “Three-Year Facility Agreement”), which amended and restated the Second Amended and Restated Credit Agreement (Three-Year Facility) dated September 5, 2019 and the related Local Currency Addendum and Japan Local Currency Addendum (collectively, the “2019 Three-Year Facility”) and (ii) a Third Amended and Restated Credit Agreement (Five-Year Facility), Local Currency Addendum and Japan Local Currency Addendum, each dated September 1, 2022 (collectively, the “Five-Year Facility Agreement”, and together with the Three-Year Facility Agreement and the 364-Day Facility, the “Credit Facilities”), which amended and restated the Second Amended and Restated Five-Year Credit Agreement (Five-Year Facility) dated September 5, 2019 and the related Local Currency Addendum and Japan Local Currency Addendum (collectively, the “2019 Five-Year Facility”).
The Three-Year Facility Agreement, among other things, extends the expiration date of the 2019 Three-Year Facility to August 29, 2025, and the Five-Year Facility Agreement, among other things, extends the expiration date of the 2019 Five-Year Facility to September 1, 2027.
The Credit Facilities are available for general corporate purposes. As of the date hereof, the Borrowers have not drawn on the Credit Facilities.
The Credit Facilities contain certain representations and warranties, covenants and events of default, including financial covenants. Under the Credit Facilities, Caterpillar is required to maintain consolidated net worth not less than $9 billion at all times. Caterpillar’s consolidated net worth is defined as the consolidated stockholder’s equity including preferred stock but excluding the pension and other post-retirement benefits balance within Accumulated other comprehensive income (loss). Cat Financial is required to maintain an interest coverage ratio above 1.15 to 1, where the interest coverage ratio is defined as the ratio of (1) profit excluding income taxes, interest expense and net gain/(loss) from interest rate derivatives to (2) interest expense, calculated at the end of each calendar quarter for the rolling four quarter period then most recently ended. Cat Financial is also required to maintain a leverage ratio (consolidated debt to consolidated net worth) not greater than 10.0 to 1, calculated (1) on a monthly basis as the average of the leverage ratios determined on the last day of each of the six preceding calendar months and (2) on each December 31. Drawings under the Credit Facilities are also subject to conditions precedent and the payment of certain facility fees.
Certain of the lenders and agents party to the Credit Facilities, as well as certain of their respective affiliates, have performed, and may in the future perform, for Caterpillar and its subsidiaries, various commercial banking, investment banking, underwriting and other financial advisory services, for which they have received and may in the future receive customary fees and expenses.
The foregoing description is qualified in its entirety by the terms and provisions of the (i) 364-Day Facility and the Local Currency Addendum and Japan Local Currency Addendum thereto; (ii) the Three-Year Facility Agreement and the Local Currency Addendum and Japan Local Currency Addendum thereto; and (iii) the Five-Year Facility Agreement and the Local Currency Addendum and Japan Local Currency Addendum thereto, which are filed as exhibits to this report, and incorporated herein by reference.
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 under Item 1.01 of this report is hereby incorporated into this Item 2.03 by reference.
Item 9.01 Financial Statements and Exhibits
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