[8-K] Otis Worldwide Corporation Reports Material Event

Rhea-AI Filing Summary

Otis Worldwide Corporation entered into a new unsecured $1,500 million revolving credit agreement dated August 8, 2025, which matures on August 8, 2030, and replaces the prior facility that had been scheduled to expire March 10, 2028. The facility names Otis Intercompany Lending Designated Activity Company as a subsidiary borrower, is administered by JPMorgan Chase Bank, N.A., is guaranteed by Otis for subsidiary borrowings, and is available for general corporate purposes.

U.S. dollar borrowings may be at term SOFR or a base rate and euro borrowings at EURIBO or daily simple ESTR, with initial margins of 1.125% for term SOFR/EURIBO/ESTR and 0.125% for base rate borrowings; margins can fluctuate with Otis’ public debt rating. The agreement permits an aggregate upsize of up to $500 million and contains customary affirmative and negative covenants, including a consolidated leverage ratio financial covenant; breaches could lead to acceleration or termination of commitments.

Positive

• $1,500 million revolving credit facility secured, providing committed liquidity maturing August 8, 2030
• Accordion option up to $500 million allowing Otis to increase the facility size if needed
• No early termination penalties were incurred when the prior credit agreement was terminated
• Relatively low initial margins of 1.125% (term SOFR/EURIBO/ESTR) and 0.125% (base rate) at signing

Negative

• Consolidated leverage ratio covenant could restrict financing flexibility and, if breached, permit acceleration or termination of commitments
• Floating-rate exposure (term SOFR, EURIBO, daily simple ESTR) subjects interest costs to market rate volatility
• Affirmative and negative covenants limit liens and sale-leaseback transactions, which may constrain certain strategic actions

Insights

Financial Analyst

TL;DR: Otis secured a $1.5B revolving facility to 2030 with low initial margins and a $500M accordion, maintaining liquidity while preserving typical covenant protections.

The new credit agreement materially refreshes Otis’ short-to-medium term liquidity profile by replacing a facility that expired in 2028 with one maturing in 2030, preserving access to committed capital for general corporate purposes. Initial margins of 1.125% (term SOFR/EURIBO/ESTR) and 0.125% (base rate) are modest and pricing can move with the company’s public debt rating, so cheap funding today could become costlier if ratings weaken. The upsize option provides additional flexibility without immediately increasing drawn debt. Overall impact is neutral-to-moderately positive for liquidity but dependent on covenant compliance and market rates.

Risk Analyst

TL;DR: The agreement reduces near-term refinancing risk and adds an accordion, but introduces floating-rate exposure and a consolidated leverage covenant that could constrain flexibility.

The credit agreement contains customary affirmative and negative covenants restricting liens and sale-leaseback transactions and imposes a maximum consolidated leverage ratio. Those constraints are standard but material: violation would permit lenders to accelerate repayment and terminate commitments. Additionally, use of term SOFR, EURIBO or ESTR ties interest expense to market rates, increasing earnings sensitivity to rate moves. No early termination penalties were incurred when the prior facility was replaced, which mitigates transaction cost risk.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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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 8, 2025

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OTIS WORLDWIDE CORPORATION

(Exact name of registrant as specified in its charter)

____________________________________

Delaware	001-39221	83-3789412
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

One Carrier Place

Farmington, Connecticut 06032

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code

(860) 674-3000

N/A

(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:

☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock ($0.01 par value)	OTIS	New York Stock Exchange
0.318% Notes due 2026	OTIS/26	New York Stock Exchange
2.875% Notes due 2027	OTIS/27	New York Stock Exchange
0.934% Notes due 2031	OTIS/31	New York Stock Exchange

Item 1.01. Entry into a Material Definitive Agreement.

On August 8, 2025, Otis Worldwide Corporation (“Otis”), entered into a new credit agreement (the “Credit Agreement”) governing its unsecured $1,500 million revolving credit facility, which matures on August 8, 2030. The Credit Agreement was entered into by and among Otis, as borrower, Otis Intercompany Lending Designated Activity Company, a designated activity company organized under the laws of Ireland (“OIL”), as subsidiary borrower, each other subsidiary borrower party thereto from time to time, the lenders party thereto JPMorgan Chase Bank, N.A. (“JPM”), as administrative agent, and the other parties thereto from time to time.

Also on August 8, 2025, Otis terminated all commitments outstanding under the existing credit agreement by and among, Otis, as borrower, OIL, as subsidiary borrower, the lenders party thereto, JPM as administrative agent, and the other parties thereto (the “Terminated Credit Agreement”). The Terminated Credit Agreement was scheduled to expire on March 10, 2028. No early termination penalties were incurred by Otis as a result of the termination of the Terminated Credit Agreement.

The obligations of OIL and any other subsidiary borrower under the Credit Agreement are guaranteed by Otis.

United States dollar-denominated borrowings under the Credit Agreement bear interest at a rate per annum equal to, at Otis’ option, either a term SOFR rate or a base rate, and euro-denominated borrowings under the Credit Agreement bear interest at a rate per annum equal to, at Otis’ option, either a EURIBO rate or a daily simple ESTR rate, in each case calculated in a manner set forth in the Credit Agreement, plus an applicable margin.

 The applicable margin initially is 1.125% for term SOFR rate, EURIBO rate and daily simple ESTR rate borrowings, and 0.125% for base rate borrowings, and can fluctuate, determined by reference to Otis’ public debt rating, as specified in the Credit Agreement. Revolving loans may be borrowed, repaid and re-borrowed, and are available for general corporate purposes. The Credit Agreement enables Otis, from time to time, to increase the revolving credit commitment in an aggregate amount not to exceed $500 million.

The Credit Agreement contains affirmative and negative covenants customary for financings of this type that, among other things, limit the ability of Otis and its wholly-owned domestic subsidiaries primarily engaged in manufacturing to incur additional liens and to enter into sale and leaseback transactions, and limit the ability of Otis and its subsidiaries to make certain fundamental changes. The Credit Agreement also contains a financial covenant that requires Otis to maintain a maximum consolidated leverage ratio. A violation of any of these covenants could result in an event of default under the Credit Agreement. Upon the occurrence of such an event of default or certain other customary events of default, payment of any outstanding amounts under the Credit Agreement may be accelerated and the lenders’ commitments to extend credit under the Credit Agreement may be terminated.

The foregoing summary of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

Item 1.02. Termination of a Material Definitive Agreement.

The information with respect to the Terminated Credit Agreement set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant.

The information with respect to the Credit Agreement set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits to this Form 8-K.

Exhibit Number	Exhibit Description
10.01	Revolving Credit Agreement, dated as of August 8, 2025, by and among Otis Worldwide Corporation, as borrower, Otis Intercompany Lending Designated Activity Company, as subsidiary borrower, each other subsidiary borrower party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent and the other parties thereto from time to time.
1.04	Cover Page Interactive Data File – the cover page iXBRL tags are embedded within the Inline XBRL document.

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.

	OTIS WORLDWIDE CORPORATION
	(Registrant)
Date: August 8, 2025	By:	/s/ Cristina Méndez
		Cristina Méndez
		Executive Vice President & Chief Financial Officer

FAQ

What did Otis (OTIS) report in this 8-K?

Otis reported entering into a new unsecured $1,500 million revolving credit agreement dated August 8, 2025, replacing its prior facility and maturing August 8, 2030.

When does the new Otis revolving credit facility mature and how large is it?

The facility is $1,500 million and matures on August 8, 2030.

Can Otis increase the size of the revolver?

Yes. The Credit Agreement enables Otis to increase the revolving credit commitment by up to $500 million in aggregate.

What interest rate options and initial margins apply under the new facility?

U.S. dollar borrowings: term SOFR or a base rate. Euro borrowings: EURIBO or daily simple ESTR. Initial margins are 1.125% for term SOFR/EURIBO/ESTR and 0.125% for base rate borrowings; margins can fluctuate with Otis' public debt rating.

Did Otis pay any penalty to terminate the prior credit agreement?

No. Otis terminated all commitments under the prior credit agreement and did not incur early termination penalties.

What covenant risks are included in the credit agreement?

The agreement includes customary affirmative and negative covenants and a maximum consolidated leverage ratio; violation could result in default, acceleration of amounts outstanding, or termination of lenders' commitments.