Hubbell Incorporated (HUBB, Financial) has announced the successful entry into a five-year credit agreement with a syndicate of lenders, including JPMorgan Chase Bank, N.A. as the administrative agent. This agreement establishes a $1.0 billion committed unsecured revolving credit facility, which can be increased to a maximum of $1.5 billion. The facility includes a $50 million sub-limit for issuing letters of credit, with a cap of $100 million for loans and letters of credit to foreign subsidiary borrowers.
The revolving credit facility is designed to support general corporate purposes, including the issuance of commercial paper. Loans under this agreement will be available in multiple currencies, including U.S. dollars, euros, pounds sterling, Canadian dollars, and Swiss francs. Borrowers have the option to choose between the Alternate Base Rate or the Term SOFR Rate for loans denominated in U.S. dollars, with an applicable margin based on Hubbell's credit ratings.
All outstanding loans under this agreement are due by March 25, 2030, with provisions for up to two one-year maturity extensions. The agreement includes customary representations, warranties, and covenants, including a financial covenant that requires the ratio of total indebtedness to total capitalization not to exceed 65% at the end of each fiscal quarter.
In conjunction with this new agreement, Hubbell has terminated its previous credit agreement dated March 12, 2021. This strategic move is expected to enhance Hubbell's financial flexibility and support its ongoing corporate initiatives.
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