Allegion Completes Extension and Increase of Revolving Credit Facility
Allegion (NYSE: ALLE) has extended and increased its senior unsecured revolving credit facility to $750 million from the previous $500 million. This new five-year facility, which remains unsecured and maintains investment-grade terms, enhances Allegion's liquidity. It allows for revolving loans, letters of credit, and swingline loans in USD, Euro, and GBP. The term loan facility, with $221.9 million outstanding as of March 31, 2024, remains unchanged and will mature on November 18, 2026. The commitment under the new facility will terminate on May 20, 2029, according to Mike Wagnes, Allegion's CFO.
- Increase in revolving credit facility from $500M to $750M.
- Five-year extension of the credit facility, providing long-term stability.
- Maintains investment-grade terms, reflecting financial health.
- Enhances liquidity, supporting business operations and growth.
- Allows for loans in USD, Euro, and GBP, offering currency flexibility.
- The term loan facility remains unchanged with $221.9M outstanding, showing no reduction in debt.
- Potential future interest costs due to increased credit facility size.
- Commitments under the new facility still have a termination date, necessitating future refinancing.
Insights
Allegion's completion of its new $750 million revolving credit facility signals a positive move towards better financial stability and liquidity. By increasing the credit facility from $500 million to $750 million, Allegion now has more flexibility to fund its operations and manage its cash flow with ease, which is particularly beneficial during economic uncertainties.
The unsecured nature of this credit facility indicates that Allegion has maintained a solid credit profile, suggesting confidence from lenders in the company's ability to meet its obligations without needing specific collateral. This speaks volumes about Allegion's financial health and the trust it has garnered among financial institutions.
For retail investors, this move can be seen as a proactive step in fortifying the company’s financial toolkit. It ensures that Allegion can continue to invest in its business, whether through research and development, acquisitions, or other strategic initiatives. The extended maturity date to May 20, 2029, further highlights long-term planning, which can be seen as a stable outlook for potential investors. However, it's essential to monitor how the company utilizes this increased capacity and whether it translates to tangible growth and returns.
From a market perspective, Allegion's strategic enhancement of its revolving credit facility aligns well with industry practices among firms looking to bolster their liquidity positions. In the security products and solutions market, having access to substantial credit can be important for addressing market demands, unexpected expenses and competition tactics.
The ability to draw in multiple currencies—U.S. Dollars, Euros and Pounds Sterling—adds a layer of flexibility that is invaluable for a company with a global footprint. This multi-currency feature allows Allegion to manage foreign exchange risks more effectively and allocate resources across different regions with greater efficiency.
Investors should see this move as Allegion's commitment to maintaining and enhancing its competitive edge. The facility's terms, comparable to investment-grade conditions, suggest robust financial management practices and strategic foresight. It will be essential to watch Allegion's performance metrics in the upcoming quarters to see if this financial maneuver translates into market share gains and revenue growth.
The new
“The new revolving credit facility supports Allegion’s already strong liquidity position and is consistent with the size of our business,” said Mike Wagnes, Allegion senior vice president and chief financial officer.
The new revolving facility, including the letters of credit and swingline loans, may be incurred in
About Allegion
Allegion (NYSE: ALLE) is a global pioneer in seamless access, with leading brands like CISA®, Interflex®, LCN®, Schlage®, SimonsVoss® and Von Duprin®. Focusing on security around the door and adjacent areas, Allegion secures people and assets with a range of solutions for homes, businesses, schools and institutions. Allegion had
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, the company’s liquidity position, and use of borrowings under the amended revolving credit facility, as well as any other statement that does not directly relate to any historical fact. These forward-looking statements generally are identified by the words “believe,” “aim,” “project,” “expect,” “anticipate,” “estimate,” “forecast,” “outlook,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result” or the negative thereof or variations thereon or similar expressions generally intended to identify forward-looking statements. Forward-looking statements may relate to such matters as projections of revenue, margins, expenses, tax rate and provisions, earnings, cash flows, benefit obligations, dividends, share purchases or other financial items; any statements of the plans, strategies and objectives of management for future operations, including those relating to any statements concerning expected development, performance or market share relating to our products and services; any statements regarding future economic conditions or our performance; any statements regarding pending investigations, claims or disputes; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Undue reliance should not be placed on any forward-looking statements, as these statements are based on the company's currently available information and our current assumptions, expectations and projections about future events. They are subject to future events, risks and uncertainties - many of which are beyond the company’s control - as well as potentially inaccurate assumptions, that could cause actual results to differ materially from those in the forward-looking statements. Important factors and other risks that may affect the company's business or that could cause actual results to differ materially are included in filings the company makes with the Securities and Exchange Commission from time to time, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q and in its other SEC filings. All forward-looking statements in this press release are expressly qualified by such cautionary statements and by reference to the underlying assumptions. The company undertakes no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240520038062/en/
Media Contact:
Whitney Moorman – Director, Global Communications
317-810-3241
Whitney.Moorman@allegion.com
Analyst Contacts:
Jobi Coyle – Director, Investor Relations
317-810-3107
Jobi.Coyle@allegion.com
Josh Pokrzywinski – Vice President, Investor Relations
463-210-8595
Joshua.Pokrzywinski@allegion.com
Source: Allegion plc
FAQ
What changes were made to Allegion's revolving credit facility in 2024?
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When will the commitments under Allegion's new revolving credit facility terminate?
