United states securities and exchange commission
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- Bu səhifədəki naviqasiya:
- Maturities of Long-Term Debt for Next Five Years at Dec 31, 2017
- 2017 Activity
- 2016 Activity
- 2015 Activity
- Available Credit Facilities
- Committed and Available Credit Facilities at Dec 31, 2017
- DCC Term Loan Facility
- Term Loan Facility
- Uncommitted Credit Facilities and Outstanding Letters of Credit
- Debt Covenants and Default Provisions
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Table of Contents 2017 Activity In 2017 , Dow redeemed $436 million of 6.0 percent notes that matured on September 15, 2017, and $32 million aggregate principal amount of International Notes ("InterNotes") at maturity. In addition, approximately $119 million of Dow's long-term debt was repaid by consolidated variable interest entities. In connection with the Merger, the fair value of debt assumed was $15,197 million and was reflected in the preceding Notes Payable and Long-Term Debt tables. See Note 3 for additional information. 2016 Activity In 2016, Dow redeemed $349 million of 2.5 percent notes that matured on February 15, 2016, and $52 million principal amount of InterNotes at maturity. In addition, approximately $128 million of Dow's long-term debt (net of $28 million of additional borrowings) was repaid by consolidated variable interest entities. As part of the DCC Transaction, the fair value of debt assumed by Dow was $4,672 million . See Note 3 for additional information. 2015 Activity In the fourth quarter of 2015, Dow redeemed $724 million aggregate principal amount of InterNotes of various interest rates and maturities between 2016 and 2024. As a result of this redemption, Dow realized an $8 million pretax loss related to the early extinguishment of debt, included in "Sundry income (expense) - net" in the consolidated statements of income and related to Corporate. On October 5, 2015, (i) Dow completed the transfer of its U.S. Gulf Coast Chlor-Alkali and Vinyl, Global Chlorinated Organics and Global Epoxy businesses into Splitco, (ii) participating Dow shareholders tendered, and Dow accepted, Dow shares for Splitco shares in a public exchange offer, and (iii) Splitco merged with a wholly owned subsidiary of Olin in a tax-efficient Reverse Morris Trust transaction. Under the terms of a debt exchange offer, Dow received $1,220 million principal amount of new debt instruments from Splitco, which were subsequently transferred to certain investment banks in a non-cash fair value exchange for $1,154 million principal amount of Dow's outstanding debt instruments owned by such investment banks. As a result of this debt exchange offer and related transactions, Dow retired $1,161 million of certain notes, including $401 million of 2.50 percent notes due 2016, $182 million of 5.70 percent notes due 2018, $278 million of 4.25 percent notes due 2020 and a $300 million Term Loan Facility with a maturity date of 2016. Dow recognized a loss on the early extinguishment of debt of $68 million , included in "Sundry income (expense) - net" in the consolidated statements of income as a component of the pretax gain on the Transaction and related to Corporate. In connection with the Transaction, a membrane chlor-alkali joint venture was included as part of the assets and liabilities divested. This resulted in an additional reduction of $569 million principal amount of debt. See Notes 6 and 23 for further information. In 2015, Dow issued $346 million aggregate principal amount of InterNotes and approximately $163 million of long-term debt (net of $8 million of additional borrowings) was repaid by consolidated variable interest entities. 129
Table of Contents Available Credit Facilities The following table summarizes the Company's credit facilities:
DCC Term Loan Facility In connection with the DCC Transaction, on May 31, 2016, Dow Corning incurred $4.5 billion of indebtedness under a certain third party credit agreement ("DCC Term Loan Facility") in order to fund the contribution of cash to Splitco. Dow subsequently guaranteed the obligations of Dow Corning under the DCC Term Loan Facility and, as a result, the covenants and events of default applicable to the DCC Term Loan Facility are substantially similar to the covenants and events of default set forth in Dow's Five Year Competitive Advance and Revolving Credit Facility. In the second quarter of 2017, Dow Corning exercised a 364 -day extension option making amounts borrowed under the DCC Term Loan Facility repayable on May 29, 2018, and amended the DCC Term Loan Facility to include an additional 19 -month extension option, at Dow Corning’s election, upon satisfaction of certain customary conditions precedent. On February 8, 2018, Dow Corning delivered a notice of intent to exercise the 19-month extension option on the DCC Term Loan Facility. See Note 3 for additional information on the DCC Transaction. Term Loan Facility In March 2016, DuPont entered into a credit agreement that provides for a three -year, senior unsecured term loan facility in the aggregate principal amount of $4.5 billion ("Term Loan Facility") under which DuPont may make up to seven term loan borrowings and amounts repaid or prepaid are not available for subsequent borrowings. The facility was amended in 2017 to extend the date on which the commitment to lend terminates to July 27, 2018. The proceeds from the borrowings under the Term Loan Facility will be used for Dupont's general corporate purposes including debt repayment, working capital and funding a portion of the Company's costs and expenses. The Term Loan Facility matures in March 2019 at which time all outstanding borrowings, including accrued but unpaid interest, become immediately due and payable. At December 31, 2017 , DuPont had made three term loan borrowings in an aggregate principal amount of $1.5 billion and had unused commitments of $3.0 billion under the Term Loan Facility. Uncommitted Credit Facilities and Outstanding Letters of Credit The Subsidiaries had uncommitted credit facilities in the form of unused bank credit lines of $2,853 million for Dow and $731 million for DuPont at December 31, 2017 . These lines can be used to support short-term liquidity needs and general corporate purposes, including letters of credit. Outstanding letters of credit were $433 million for Dow and $177 million for DuPont at December 31, 2017 . These letters of credit support commitments made in the ordinary course of business. Debt Covenants and Default Provisions The Subsidiaries outstanding long-term debt obligations have been issued primarily under indentures which contain, among other provisions, certain customary restrictive covenants with which each of the Subsidiaries must comply while the underlying notes are outstanding. Failure of either Dow or DuPont to comply with any of its respective covenants, could result in a default under the applicable indenture and allow the note holders to accelerate the due date of the outstanding principal and accrued interest on the underlying notes. 130 Table of Contents Dow Debt Covenants and Default Provisions Dow's indenture covenants include obligations to not allow liens on principal U.S. manufacturing facilities, enter into sale and lease-back transactions with respect to principal U.S. manufacturing facilities, merge or consolidate with any other corporation, or sell, lease or convey, directly or indirectly, all or substantially all of Dow's assets. The outstanding debt also contains customary default provisions. Dow’s primary, private credit agreements also contain certain customary restrictive covenant and default provisions in addition to the covenants set forth above with respect to Dow's debt. Significant other restrictive covenants and default provisions related to these agreements include:
Failure of Dow to comply with any of the covenants or default provisions could result in a default under the applicable credit agreement which would allow the lenders to not fund future loan requests and to accelerate the due date of the outstanding principal and accrued interest on any outstanding Dow indebtedness. DuPont Debt Covenants and Default Provisions DuPont's indenture covenants include customary limitations on liens, sale and leaseback transactions, and mergers and consolidations affecting manufacturing plants, mineral producing properties or research facilities located in the U.S. and the consolidated subsidiaries owning such plants, properties and facilities subject to certain limitations. The outstanding long-term debt also contains customary default provisions. In addition, in May 2017, DuPont issued $1,250 million of 2.20 percent notes due 2020 and $750 million of floating rate notes due 2020 that must be redeemed upon the announcement of the record date for the separation of DuPont's agriculture line or specialty products line of business or the entry into an agreement to sell all or substantially all of the assets of either line of business to a third party. The DuPont Term Loan Facility and the amended DuPont Revolving Credit Facility contain customary representations and warranties, affirmative and negative covenants, and events of default that are typical for companies with similar credit ratings and generally consistent with DuPont’s indenture covenants. The DuPont Term Loan Facility and the amended DuPont Revolving Credit Facility also contain a financial covenant requiring that the ratio of total indebtedness to total capitalization for DuPont and its consolidated subsidiaries not exceed 0.6667 to 1.00 .
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