Item 1.01
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Entry into a Material Definitive Agreement
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Corning Incorporated (Corning or the Company) entered into a $1,500,000,000 Credit Agreement (the Credit
Agreement), dated as of August 15, 2018, which replaces the Companys existing $2,000,000,000 Amended and Restated Credit Agreement dated September 30, 2014 (the Existing Credit Agreement).
The Credit Agreement is with a bank group comprised of JPMorgan Chase Bank, N.A., Citibank, N.A., Bank of America, N.A., Goldman Sachs Bank
USA, HSBC Bank USA, National Association, Morgan Stanley Bank, N.A., MUFG Bank, Ltd., Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, Wells Fargo Bank, National Association, Bank of China New York Branch, and The Bank of New York
Mellon. Under the Credit Agreement, borrowings are available in Dollars, Sterling, Yen and Euros to Corning and any direct or indirect wholly-owned subsidiary of Corning in a maximum amount outstanding at any one time of $1,500,000,000 (the
Commitment Amount). The Commitment Amount may be increased over the term by up to $500,000,000 subject to existing or new lenders committing to fund such increase.
The rate of interest payable under the Credit Agreement, at Cornings option, is equal to LIBOR (or EURIBOR in the case of Euro
denominated advances), or, with the Companys consent, an alternate rate of interest should LIBOR or EURIBOR cease to be available, plus a margin ranging from 0.680% to 1.125% or a base rate plus a margin ranging from 0.000% to 0.125%. The
actual margin is adjustable based upon the debt ratings issued from time to time with respect to Cornings unsecured debt by Moodys Investors Service, Inc. and Standard & Poors. For this purpose, the base rate
is the highest of the rate quoted by The Wall Street Journal from time to time as its prime rate, the federal funds rate plus 0.5% or the
one-month
LIBOR plus 1.0%. Corning is also obligated to pay
quarterly facilities fees on the aggregate commitments under the Amended and Restated Credit Agreement.
The Credit Agreement is scheduled
to terminate on August 15, 2023 (the Termination Date). The Termination Date may be extended by up to two additional
one-year
periods on any anniversary of the Credit Agreements closing
date on Cornings request and subject to the consent of the lenders and certain other requirements set forth in the Credit Agreement. The Credit Agreement contains affirmative and negative covenants that Corning must comply with, including
(a) periodic financial reporting requirements, (b) maintaining a ratio of consolidated debt for borrowed money to consolidated total capital of no greater than 0.60 to 1.00, (c) limitation on liens, (d) limitation on the
incurrence of subsidiary indebtedness, and (e) limitation on mergers, as well as other customary covenants. Loans to subsidiaries under the Credit Agreement will be unconditionally guaranteed by Corning.
The Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or
interest when due, failure to perform or observe covenants, bankruptcy or insolvency events and change of control. Upon the occurrence of an event of default, the obligations of the lenders to make advances may be terminated and the Companys
obligation to repay advances may be accelerated.
At the time the Credit Agreement was executed, there were no borrowings outstanding under
the Existing Credit Agreement and there are no amounts outstanding under the Credit Agreement.
From time to time, certain of the lenders
under the Credit Agreement and their affiliates provide customary commercial and investment banking services to the Company.
The
foregoing description of the material terms of the Credit Agreement is qualified in its entirety by reference to the Credit Agreement, which is attached as Exhibit 10.1 to this report and incorporated herein by reference.