Harris amends revolver financial covenant, adds lenders to bridge loan

By Marisa Wong

Madison, Wis., March 3 – Harris Corp. entered into an amendment to its revolving credit agreement dated Sept. 28, 2012 on Feb. 25, according to an 8-K filing with the Securities and Exchange Commission.

The amendment makes changes to the revolver to require Harris subsidiaries that incur, borrow or guarantee debt in a principal amount exceeding $100 million to become guarantors under the credit agreement.

The company also amended the financial maintenance covenant to increase the permitted ratio of consolidated total indebtedness to total capital to 0.65 to 1.00 from 0.60 to 1.00 prior to Harris’ acquisition of Exelis, Inc., then to 0.675 to 1.00 for the nine-month period from and including the date that Harris acquires Exelis and to 0.65 to 1.00 after that.

On the revolver amendment date, Harris also entered into a joinder agreement and amendment to its commitment letter with Morgan Stanley Senior Funding, Inc. Under the joinder, Citibank, NA, SunTrust Bank, Wells Fargo Bank, NA, HSBC Bank USA, NA and Bank of America, NA each agreed to become a party to the commitment letter and provide a portion of the commitments for the bridge facility.

In February, the company announced that it planned to use a combination of term loans and new bonds to fund its acquisition of Exelis and to refinance its existing debt. The company expects to replace the $3.4 billion fully committed bridge loan with permanent financing.

The Exelis transaction is valued at $4.75 billion and is expected to close in June.

Harris, based in Melbourne, Fla., provides voice, data and video communications equipment for wireless, broadcast, network support and government markets. Exelis is a White Plains, N.Y., defense technology segment, and eventual spinoff, of diversified manufacturing company ITT.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.