Ecolab Inc. (ECL, Financial) has announced the successful entry into a fourth amended and restated multicurrency credit agreement, establishing a $2.0 billion unsecured 5-year revolving credit facility. This new facility, which matures in March 2030, replaces the previous $2.0 billion credit facility that was set to mature in April 2026.
The 5-Year Facility is designed to support Ecolab's general corporate purposes, including share repurchases, debt repayment, and potential acquisitions. The agreement involves multiple lenders, with Bank of America, N.A. serving as the administrative agent and swing line bank.
Borrowings under this facility will bear interest based on various options depending on the currency. For U.S. Dollar loans, Ecolab can choose between a base rate or Term SOFR, both with an applicable margin. Euro, Yen, and Sterling loans will be subject to EURIBOR, TIBOR, and SONIA rates, respectively, each with an applicable margin. Interest periods for these loans range from one to six months.
The facility also includes a $100 million letter of credit subfacility and a $75 million swing line loan subfacility. Ecolab is required to pay a facility fee ranging from 0.05% to 0.125% per annum, and a fee on letters of credit ranging from 0.70% to 1.125% per annum, based on its credit rating.
Additionally, the agreement mandates Ecolab to maintain a minimum interest expense coverage ratio and includes customary covenants and conditions. The lenders involved may also engage in various financial services with Ecolab, receiving customary fees for these services.
This strategic financial move underscores Ecolab's commitment to maintaining robust financial flexibility and supporting its long-term growth objectives.
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