Business Context and Reporting Period
This Form 8-K Current Report was filed by Baker Hughes Company and Baker Hughes, a GE company, LLC on December 10, 2019. The filing reports the entry into a new material definitive agreement regarding corporate financing.
Key Financial Metrics
The filing details a new revolving credit facility with the following terms:
- Facility Size: $3.0 billion aggregate principal amount.
- Term: Five years, maturing on December 10, 2024.
- Interest Rate: Based on the Eurodollar rate or alternative base rate plus a ratings-based margin.
- Administrative Agent: JPMorgan Chase Bank, N.A.
- Outstanding Borrowings: The filing does not state the amount drawn under the new facility at the time of signing, but notes that no borrowings were outstanding under the terminated 2017 agreement.
Material Changes
On December 10, 2019, the company terminated its existing five-year committed $3.0 billion revolving credit agreement dated July 3, 2017. This termination was executed in connection with the entry into the new Credit Agreement. The filing confirms that no borrowings were outstanding under the 2017 agreement at the time of termination.
Outlook, Risks, and Contingencies
The new Credit Agreement includes customary representations, warranties, affirmative and negative covenants, and events of default. Specific risks include cross-acceleration to certain indebtedness and events of bankruptcy. If an event of default occurs, lenders are entitled to accelerate amounts due under the agreement. The filing does not provide specific management commentary on future revenue or operational outlook beyond the financing arrangement.
Investor Verification Checklist
- Verify the specific ratings-based margin applied to the interest rate in the full text of the Credit Agreement (Exhibit 10.1).
- Review the specific affirmative and negative covenants to understand operational restrictions.
- Confirm the current utilization rate of the $3.0 billion facility in subsequent quarterly reports.
- Check for any cross-default triggers related to other existing indebtedness.