Honeywell International completed its spin-off of Garrett Motion, Honeywell’s former Transportation Systems business.
To support the transaction, the Honeywell Group entered into a credit facility agreement providing in particular for a senior secured term loan facility in an approximate aggregate principal amount of $1.66 billion (or its euro equivalent) and a senior secured first-lien revolving credit facility in an aggregate principal amount of €430 million ($499 million).
According to a related 8-K filing, JPMorgan served as administrative agent on the transaction.
Also in connection with the spin-off, on September 27, 2018, the company entered into a credit agreement, by and among the company, Garrett LX I, Garrett LX II (Lux Guaranto”), Garrett (Lux Borrower), Garrett Borrowing (U.S. co-borrower) and Honeywell Technologies (Swiss Borrow) and the lenders and issuing banks party with JPMorgan Chase as administrative agent which provides for senior secured financing of approximately the euro equivalent of $1.254 billion, consisting of:
- a seven-year senior secured first-lien term B loan facility, which consists of a tranche denominated in euro of €375 million ($435 million) and a tranche denominated in U.S. dollars of $425 million
- a five-year senior secured first-lien term A loan facility in an aggregate principal amount of €330 million ($383 million)
- a five-year senior secured first-lien revolving credit facility in an aggregate principal amount of €430 million ($499 million) with revolving loans to the Swiss borrower, to be made available in a number of currencies including Australian dollars, Euros, pounds sterling, Swiss francs, U.S. dollars and yen.
- Up to the equivalent of €215 million ($249 million) may be utilized under the revolving credit facility for the issuance of letters of credit to Swiss borrower or any of its subsidiaries. letters of credit are available for issuance under the credit agreement on terms and conditions customary for financings of this kind, which issuances will reduce availability under the revolving credit facility.
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The borrowers borrowed an aggregate amount of $425 million and €705 million ($818 million) under the term loan facilities in the aggregate on the financing closing date. The letters of credit and revolving credit facility are available for working capital and other general corporate purposes from time to time after the effective date prior to the final maturity of the revolving credit facility.
Honeywell is a Fortune 100 software-industrial company that delivers industry-specific solutions that include aerospace products and services, control technologies for buildings and industry, and performance materials globally.
Garrett Motion designs, manufactures and sells highly engineered turbocharger and electric boosting technologies for light and commercial vehicle original equipment manufacturers and the aftermarket.
Lenz & Staehelin acted as Swiss counsel to the Honeywell Group. Paul, Weiss represented Honeywell on the deal.
