The Boeing Company entered into a $10 billion supplemental credit agreement with a syndicate of lenders, as detailed in a recently filed 8-K report. The agreement, which involves BofA Securities, Citibank, Goldman Sachs Lending Partners and JPMorgan Chase Bank as joint lead arrangers and book managers, is designed to enhance Boeing’s liquidity for ongoing operations and future initiatives.
Citibank will serve as the administrative agent for the agreement, with BofA, Goldman, and JPMorgan acting as co-syndication agents. The terms of the credit facility include a funding fee of 0.50% on each advance, as well as a duration fee ranging from 0.50% to 1.00% on outstanding advances and unused commitments, depending on the duration of the borrowing.
Borrowings under this credit agreement will bear interest based on Boeing’s credit rating. For non-SOFR-based borrowings, the interest rate will be calculated based on the highest of Citibank’s base rate, the federal funds rate plus 0.50%, or Adjusted Term SOFR for a period of one month plus 1.00%, with an additional margin of 0.375% to 1.00%. For SOFR-based borrowings, the rate will be Adjusted Term SOFR plus an additional margin of 1.375% to 2.00%. The commitments under the agreement are set to terminate 120 days from the agreement date, and any outstanding advances will mature 364 days after the agreement date.
The credit agreement includes customary covenants, such as restrictions on Boeing’s consolidated debt exceeding 60% of its total capital, limitations on the incurrence of liens above $250 million, and prohibitions on mergers or consolidations unless Boeing remains the surviving entity. In addition, the agreement outlines default events, including failure to meet payment deadlines, breaches of covenants, or insolvency, which would grant lenders the right to demand repayment of outstanding amounts and suspend further advances.
Boeing’s ability to prepay advances or reduce commitments will be subject to certain conditions, such as debt incurrence, equity issuance, or asset disposition, in line with the terms of the agreement. The 8-K filing also notes that some of the participating lenders have provided, and may continue to provide, other financial services to Boeing and its subsidiaries.
This credit agreement, which provides Boeing with enhanced financial flexibility, is filed as Exhibit 10.1 in the company’s 8-K report dated October 14, 2024.
