Honeywell 2006 Annual Report Download - page 93

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
require the repayment of any outstanding borrowings under the credit agreement. Such events of default include: (a) non-payment of
credit agreement debt, interest or fees; (b) non-compliance with the terms of the credit agreement covenants; (c) cross-default to other
debt in certain circumstances; (d) bankruptcy; and (e) defaults upon obligations under Employee Retirement Income Security Act.
Additionally, each of the banks has the right to terminate its commitment to lend additional funds or issue letters of credit under the
agreement if any person or group acquires beneficial ownership of 30 percent or more of our voting stock, or, during any 12-month
period, individuals who were directors of Honeywell at the beginning of the period cease to constitute a majority of the Board of
Directors (the Board).
Loans under the $2.3 billion credit facility are required to be repaid no later than April 27, 2011. We have agreed to pay a facility
fee of 0.06 percent per annum on the aggregate commitment.
Interest on borrowings under the $2.3 billion credit facility would be determined, at Honeywell's option, by (a) an auction bidding
procedure; (b) the highest of the floating base rate publicly announced by Citibank, N.A., 0.5 percent above the average CD rate, or
0.5 percent above the Federal funds rate; or (c) the Eurocurrency rate plus 0.14 percent (applicable margin).
The facility fee, the applicable margin over the Eurocurrency rate and the letter of credit issuance fee, are subject to change, based
upon a grid determined by our long term debt ratings. The credit agreement is not subject to termination based upon a decrease in our
debt ratings or a material adverse change.
A 364-Day Canadian dollar credit facility arranged by Citibank, N.A., Canadian Branch was renewed on September 8, 2006, for
220 million Canadian dollars. The facility was established for general corporate purposes, including support for the issuance of
commercial paper in Canada. There are no borrowings outstanding under this credit facility at December 31, 2006. We have agreed to
pay a facility fee of 0.06 percent per annum on the commitment amount. Interest on borrowings under this facility would be
determined, at Honeywell's option, by (a) the highest of the floating base rate publicly announced by Citibank, N.A., 0.5 percent above
the average CD rate, or 0.5 percent above the Federal funds rate; (b) the highest of the Canadian dollar prime rate publicly announced
by Citibank, N.A. or 0.5 percent above the Canadian dollar bankers' acceptance; or (c) the Eurocurrency rate or bankers' acceptance
plus 0.24 percent (applicable margin).
In March 2006, the Company issued $300 million of floating rate (LIBOR + 6 bps) Senior Notes due 2009, $400 million 5.40%
Senior Notes due 2016 and $550 million 5.70% Senior Notes due 2036 (collectively, the “Notes”). The Notes are senior unsecured
and unsubordinated obligations of Honeywell and rank equally with all of Honeywell's existing and future senior unsecured debt and
senior to all Honeywell's subordinated debt. The offering resulted in gross proceeds of $1,250 million, offset by $11 million in
discount and closing costs relating to the offering.
During the first quarter of 2006, the Company made a cash tender offer and repurchased $225 million of its $500 million 5.125%
Notes due November 2006. The costs relating to the early redemption of the Notes were immaterial.
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