Meritor Acquisition and 2022 Financial Results
Table of Contents
On August 18, 2021, we entered into an amended and restated5-year revolving credit agreement, which allows us to borrow up to $2 billion of unsecured funds at any time
prior to August 18, 2026. In connection with the new credit agreements, on August 17, 2022, we entered into an amendment to our $2.0 billion five-year facility to replace
LIBOR with Secured Overnight Financing Rate (SOFR) as an interest rate benchmark and to make other conforming changes to interest rate determinations. Amounts payable
under our revolving credit facility rank pro rata with all of our unsecured, unsubordinated indebtedness. Up to $300 million under this credit facility is available for swingline
loans. Based on our current long-term debt ratings, the applicable margin on SOFR rate loans was 0.85 percent per annum including a 0.10 percent LIBOR to SOFR adjustment
as of December 31, 2022. Advances under the facility may be prepaid without premium or penalty, subject to customary breakage costs.
Our credit agreements include various covenants, including, among others, maintaining a net debt to total capital ratio of no more than .65 to 1.0. At December 31, 2022, we
were in compliance with the financial debt covenants. We intend to maintain credit facilities at the current or higher aggregate amounts by renewing or replacing these facilities
at or before expiration. These revolving credit facilities are maintained primarily to provide backup liquidity for our commercial paper borrowings and general corporate
purposes. There were no outstanding borrowings under these facilities at December 31, 2022.
The total combined borrowing capacity under the revolving credit facilities and commercial programs should not exceed $4.0 billion. At December 31, 2022, our $2.6 billion of
commercial paper outstanding effectively reduced the $4.0 billion available capacity under our revolving credit facilities to $1.4 billion.
At December 31, 2022, we also had $226 million available for borrowings under our international and other domestic credit facilities.
Long-term Debt
A summary of long-term debt was as follows:
In millions
Long-term debt
Senior notes, due 2023 (1)
Term loan, due 2025
Senior notes, due 2025 (2)
Debentures, due 2027
Debentures, due 2028
Senior notes, due 2030 (2)
Senior notes, due 2043
Senior notes, due 2050
Debentures, due 2098 (3)
Other debt
Unamortized discount and deferred issuance costs
Fair value adjustments due to hedge on indebtedness
Finance leases
Total long-term debt
Less: Current maturities of long-term debt
Long-term debt
Interest Rate
December 31,
2022
2021
3.65%
$
Variable
500 $
1,550
500
0.75%
500
500
6.75%
58
58
7.125%
250
250
1.50%
850
850
4.875%
500
500
2.60%
650
650
5.65%
165
165
121
110
(64)
(68)
(122)
34
113
89
5,071
3,638
573
59
$
4,498
$
3,579
(1) Senior notes, due 2023, are classified as current maturities of long-term debt at December 31, 2022.
(2) In 2021 we entered into a series of interest rate swaps to effectively convert from a fixed rate to floating rate. See "Interest Rate Risk" section of NOTE 22, "DERIVATIVES," for
additional information.
(3) The effective interest rate is 7.48 percent.
Principal payments required on long-term debt during the next five years are as follows:
In millions
2023
2024
2025
2026
2027
Principal payments
$
573
$
44
$
2,061
56
$
64
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