Fitch Expects to Rate Whirlpool’s $2.5B CP Program ‘F2′
Fitch Ratings expects to rate Whirlpool Corporation’s (WHR) $2.5 billion U.S. commercial paper (CP) program ‘F2′ upon completion of the Maytag merger, which remains subject to Department of Justice clearance. All of Whirlpool’s ratings remain on Rating Watch Negative by Fitch pending completion of the acquisition of Maytag. For additional information regarding Fitch’s expectations for Whirlpool’s ratings, see the Fitch press release dated Oct. 13, 2005 (’Fitch: Downgrade Likely for Whirlpool after Maytag Acquisition’) and available on the Fitch Ratings web site at www.fitchratings.com.
WHR is increasing its CP program to improve its flexibility regarding the financing of the Maytag acquisition and upcoming debt maturities of the combined company. WHR’s CP is fully backed by the company’s credit facilities, which were amended on Dec. 2, 2005. The facilities provide for an aggregate of $2.7 billion in committed unsecured revolving credit facilities and amend and restate its existing credit facilities. WHR has entered into a $2.2 billion five-year revolving credit agreement and a $500 million 364-day revolving credit agreement. Borrowing capacity of $1.2 billion became available on Dec. 2, 2005. Borrowing capacity of $500 million under the 364-day credit agreement and the remaining $1 billion under the amended agreement will become available upon final clearance of the acquisition of Maytag Corporation by the Antitrust Division of the Department of Justice. Borrowings under the credit facilities will be available to WHR and designated subsidiaries for general corporate purposes, including commercial paper support. At no time will outstandings under the CP program exceed WHR’s committed and available credit facilities.
The credit facilities require WHR to meet certain covenants including financial tests. Maintenance tests for leverage and interest coverage are defined as total debt/EBITDA of less than or equal to 3.0 times (x) to 1.0x and EBIT to interest expense greater than or equal to 2.0x to 1.0x, respectively.
WHR is increasing its CP program to improve its flexibility regarding the financing of the Maytag acquisition and upcoming debt maturities of the combined company. WHR’s CP is fully backed by the company’s credit facilities, which were amended on Dec. 2, 2005. The facilities provide for an aggregate of $2.7 billion in committed unsecured revolving credit facilities and amend and restate its existing credit facilities.
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