Current Report Filing (8-k)
August 09 2016 - 11:27AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 3, 2016
SOUTHWEST AIRLINES CO.
(Exact name of registrant as specified in its charter)
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Texas
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1-7259
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74-1563240
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(State or other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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P.O. Box 36611, Dallas, Texas
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75235-1611
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code: (214) 792-4000
Not Applicable
(Former
name or former address if changed since last report.)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01.
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Entry into a Material Definitive Agreement
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The information included pursuant to Item
2.03 is incorporated by reference into this Item 1.01.
Item 1.02.
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Termination of a Material Definitive Agreement
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As of August 3, 2016, in connection with
the entry by Southwest Airlines Co. (the Company or we) into the new revolving credit agreement described in Item 2.03 hereof, the Company terminated the revolving credit facility dated as of April 2, 2013, with a syndicate
of banks including Citibank, N.A. and JPMorgan Chase Bank, N.A., as co-administrative agents. The prior credit facility would have expired April 2, 2018.
Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
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On August 3, 2016, we entered into a new $1 billion five-year revolving credit facility agreement (the Revolving Credit Agreement)
with a syndicate of lenders identified in the Revolving Credit Agreement. JPMorgan Chase Bank, N.A. and Citibank, N.A. act as co-administrative agents and JPMorgan Chase Bank, N.A. acts as paying agent under the Revolving Credit Agreement. The
Revolving Credit Agreement has an accordion feature that would allow the Company, subject to, among other things, the procurement of incremental commitments, to increase the size of the facility to $1.5 billion.
As of the date hereof, there are no amounts outstanding under the Revolving Credit Agreement. Generally, amounts outstanding under the
Revolving Credit Agreement bear interest at interest rates based on either the LIBOR rate (selected by the Company for designated interest periods) or the alternate base rate (being the highest of (1) the prime rate, (2) one-month LIBOR
plus 1% or (3) the New York Fed Bank Rate, plus 0.5%). The underlying LIBOR rate and alternate base rate are each subject to a floor of 0% per annum. The commitments under the Revolving Credit Agreement may also be used by the
Company for the issuance by certain of the lenders party thereto of letters of credit for our account. We are required to pay certain fees in connection with the Revolving Credit Agreement. For example, we must pay commitment fees on a quarterly
basis in respect of the unutilized portion of the commitments under the Revolving Credit Agreement. Additionally, we are required to pay certain fees to the paying agent for administrative services.
The Revolving Credit Agreement contains customary representations and warranties, covenants and events of default. The Revolving Credit
Agreement also requires the Company to maintain a specified ratio of (x) adjusted net income (before interest, taxes, depreciation, amortization and aircraft rental expense) less cash dividends to (y) interest and aircraft rental expense, and to
maintain an unencumbered pool of aircraft with a defined value during the term of the Revolving Credit Agreement. Amounts outstanding under the Revolving Credit Agreement may be accelerated upon the occurrence of an event of default.
While the Revolving Credit Agreement is for a term of five years, we have the right, subject to, among other things, the agreement of the
facilitys banks to do so, to request up to two times a one-year extension of the facility.
The Revolving Credit Agreement has been
filed herewith to provide investors with the agreed upon terms of the transactions described in this Form 8-K. The Revolving Credit Agreement is not intended to be a source of factual, business or operational information about our company or our
subsidiaries. The representations, warranties and covenants contained in the Revolving Credit Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be
subject to limitations agreed upon by the parties, including being qualified by disclosures for the purpose of allocating contractual risk between the parties instead of establishing matters as facts; and may be subject to standards of materiality
applicable to the contracting parties that differ from those applicable to investors or security holders. Accordingly, investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the
actual state of facts or condition of the parties.
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The description of the Revolving Credit Agreement in this Item 2.03 is qualified in its entirety
by reference to the full text of the Revolving Credit Agreement, a copy of which is attached to this report as Exhibit 10.1. Capitalized terms used but not defined herein have the meanings ascribed to them in the Revolving Credit Agreement.
Item 9.01.
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Financial Statements and Exhibits
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(d)
Exhibits
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10.1
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$1,000,000,000 Revolving Credit Facility Agreement among Southwest Airlines Co., the Banks party thereto, Barclays Bank PLC, as Syndication Agent, Bank of America, N.A., BNP Paribas, Goldman Sachs Bank USA, Morgan
Stanley Senior Funding, Inc., U.S. Bank National Association and Wells Fargo Bank, N.A., as Documentation Agents, JPMorgan Chase Bank, N.A. and Citibank, N.A., as Co-Administrative Agents and JPMorgan Chase Bank, N.A., as Paying Agent, dated as of
August 3, 2016.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,
hereunto duly authorized.
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SOUTHWEST AIRLINES CO.
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Date: August 9, 2016
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By:
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/s/ Mark R. Shaw
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Mark R. Shaw
Senior Vice President, General
Counsel, and Corporate Secretary
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Exhibit Index
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Exhibit No.
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Description
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10.1
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$1,000,000,000 Revolving Credit Facility Agreement among Southwest Airlines Co., the Banks party thereto, Barclays Bank PLC, as Syndication Agent, Bank of America, N.A., BNP Paribas, Goldman Sachs Bank USA, Morgan Stanley Senior
Funding, Inc., U.S. Bank National Association and Wells Fargo Bank, N.A., as Documentation Agents, JPMorgan Chase Bank, N.A. and Citibank, N.A., as Co-Administrative Agents and JPMorgan Chase Bank, N.A., as Paying Agent, dated as of August 3,
2016.
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