Business Context and Reporting Period
Company: The Boeing Company (Boeing)
Filing Type: Form 8-K (Current Report)
Date of Report: October 30, 2019
Event: Entry into Material Definitive Agreements regarding new revolving credit facilities.
Key Financial Metrics and Debt Structure
This filing details the establishment of three new revolving credit agreements totaling $9.6 billion in committed liquidity. The filing does not provide current revenue, profit, cash flow, or margin data.
- 364-Day Credit Agreement: $3.2 billion facility replacing the prior year's agreement. Terminates October 28, 2020. Commitment fee: 0.04% per annum.
- 5-Year Credit Agreement: $3.2 billion facility replacing a $2.51 billion facility from 2011. Terminates October 30, 2024. Commitment fee: 0.045% to 0.125% per annum (rating dependent).
- 3-Year Credit Agreement: $3.2 billion facility. Terminates October 30, 2022. Commitment fee: 0.045% to 0.125% per annum (rating dependent).
- Interest Rates: Variable rates based on Base Rate, Federal Funds Rate, or ICE benchmark rates plus applicable margins (ranging from 0.58% to 1.00% for Eurodollar-based borrowings).
Material Changes Versus Prior Period
The primary material change is the restructuring of Boeing's short-term and medium-term liquidity facilities:
- Capacity Increase: The 5-Year facility capacity increased from $2.51 billion to $3.2 billion.
- Facility Replacement: The 364-Day and 5-Year agreements replace expiring or older credit facilities to ensure continuous access to capital.
- Extension Options: New agreements include rights to extend terms (364 days for the short-term facility; one year annually for the 3-Year and 5-Year facilities).
Guidance, Risks, and Covenants
The filing contains no forward-looking financial guidance or management commentary on operational performance. Key contractual terms and risks include:
- Debt Covenants: Restricts consolidated debt to no more than 60% of total capital. Limits on incurring liens, mergers, or consolidations.
- Events of Default: Include failure to pay principal/interest within five days, material misrepresentation, uncured covenant breaches, cross-defaults, ERISA liabilities, and bankruptcy.
- Consequences of Default: Lenders may accelerate repayment of all outstanding amounts and cease further funding.
Investor Verification Checklist
- Verify Boeing's current credit rating to determine the exact commitment fees and interest rate margins applicable to the new facilities.
- Confirm the company's current consolidated debt-to-total capital ratio to ensure compliance with the 60% covenant.
- Review the full text of Exhibits 10.1, 10.2, and 10.3 for specific definitions of "total capital" and "consolidated debt."
- Monitor subsequent filings for any actual drawdowns on these facilities, as the filing only establishes the credit lines.