Tyco units enter $1.75 billion of revolvers, $2.25 billion bridge loan

By Marisa Wong

Madison, Wis., June 27 - Two Tyco International Ltd. subsidiaries entered into new five-year revolving credit facilities on June 22, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Tyco International Finance SA entered into a $1 billion senior credit agreement due June 22, 2017 with Citibank, NA as administrative agent and Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Bank of America Merrill Lynch as bookrunners and lead arrangers. There is an option to increase total commitments to $1.25 billion.

ADT Corp. entered into a senior revolving credit agreement due June 22, 2017 with Citibank as administrative agent, JPMorgan Chase Bank, NA as syndication agent and Citigroup Global Markets and J.P. Morgan Securities as bookrunners and lead arrangers. The agreement provides for $750 million of commitments, with an option to increase the total amount to $1 billion. However, availability under the ADT revolving facility is limited to $250 million until all of ADT's outstanding stock is distributed to Tyco's shareholders.

Tyco announced it is planning a spinoff of ADT. If the spinoff is not completed by March 1, 2013, the maturity date of the ADT facility will be March 1, 2013.

The parent company is the guarantor for both revolvers.

In connection with entering into the new credit agreement, Tyco International Finance terminated its $750 million four-year senior credit agreement dated March 24, 2011, which was scheduled to expire in March 2015.

Also, commitments under Tyco International Finance's existing five-year senior credit agreement dated April 25, 2007 were reduced to $500 million from $640 million. The 2007 facility was scheduled to expire on Sept. 30, 2012.

Tyco International Finance now has senior revolving credit lines available in the amount of $1.5 billion. That amount will be reduced to $1 billion upon completion of the distribution of ADT's stock.

Borrowings under the Tyco International Finance revolver will bear interest at Libor plus 69 basis points to 120 bps. Borrowings under the ADT revolver will bear interest at Libor plus 79.5 bps to 145 bps. The applicable margin for each facility is based on Tyco's debt ratings.

The revolving credit agreements contain affirmative and negative covenants, as well as financial covenants relating to Tyco's leverage ratio.

No proceeds from either revolver were drawn down at closing.

ADT gets bridge loan

On June 22, ADT also entered into a 364-day senior bridge loan agreement with JPMorgan Chase Bank as administrative agent. The total amount available under the bridge loan is $2.25 billion.

Goldman Sachs USA, J.P. Morgan Securities, Citigroup Global Markets and Bank of America Merrill Lynch are the bookrunners and lead arrangers. Goldman Sachs Bank USA is the syndication agent, and Citibank and Bank of America, NA are documentation agents.

Proceeds from the bridge loan will be used to fund the distribution and related transactions.

Interest is equal to Libor plus 112.5 bps to 150 bps, depending on Tyco's debt ratings.

The bridge loan contains covenants similar to those of the new revolving facilities.

Tyco is a Princeton, N.J.-based provider of electronic security products and services, fire protection and detection products and flow control.

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