Sherwin Renews Credit Facility - Analyst Blog
July 14 2011 - 11:45AM
Zacks
The Sherwin-Williams
Company (SHW) has recently entered into a 5-year $1.05
billion New Credit Agreement, with lenders including Bank
of America Corporation (BAC) as an administrative agent,
Wells Fargo & Company (WFC) as syndication
agent and JPMorgan Chase & Co. (JPM) and
Citigroup Inc. (C) as co-documentation agents. The
proceeds from the new facility are likely to be used for general
corporate purposes and working capital.
Under the terms of the new agreement
Sherwin Williams can expand its existing facility only with the
approval of the lenders and their participation in each increase.
The increase can be done for an additional amount of $250 million.
The new credit facility will mature on July 8, 2016 and bestows the
right on Sherwin-Williams to request the lenders to extend the
maturity for two additional periods of one year each.
The new credit agreement terminated
the earlier credit agreement of $500 million for three years with
effect from July 8, 2011, which would mature on January 8, 2013.
Both the agreements are similar in terms of representations,
warranties, covenants and events of default, except that the new
agreement contains a clause that at any point in time
Sherwin-Williams will have to maintain a consolidated leverage
ratio of 3.25:1. Shares of Sherwin-Williams presently retain a
Zacks #3 Rank (short-term Hold recommendation).
Founded in 1866 and headquartered in
Cleveland, Ohio, The Sherwin Williams Company manufactures and
markets paints, coatings and related products, primarily in the
North and South America. The company also has operations in the
Caribbean region, Europe and Asia.
Sherwin runs its business under
three broad heads − Paint Stores Group, Consumer Group and Global
Finishes Group. The company’s key competitors include PPG
Industries Inc. (PPG), The Valspar
Corporation (VAL) and Air Products and Chemicals
Inc. (APD).
AIR PRODS & CHE (APD): Free Stock Analysis Report
BANK OF AMER CP (BAC): Free Stock Analysis Report
CITIGROUP INC (C): Free Stock Analysis Report
JPMORGAN CHASE (JPM): Free Stock Analysis Report
PPG INDS INC (PPG): Free Stock Analysis Report
SHERWIN WILLIAM (SHW): Free Stock Analysis Report
VALSPAR CORP (VAL): Free Stock Analysis Report
WELLS FARGO-NEW (WFC): Free Stock Analysis Report
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