Xylem secures new $1.5B five-year credit line
Rhea-AI Filing Summary
Xylem Inc. (XYL) entered into a new Five-Year Revolving Credit Facility Agreement providing a senior unsecured revolving credit facility with aggregate commitments of $1.5 billion, available in U.S. dollars and Euros, with a syndicate of banks arranged by Citibank, BNP Paribas, ING, JPMorgan and Wells Fargo. The company may request increases of up to $500 million, for a maximum aggregate principal amount of $2.0 billion. The facility is intended for working capital and other general corporate purposes.
Borrowings bear interest at a base rate or Term SOFR or EURIBOR plus a margin set by a pricing grid tied to Xylem’s credit rating and an annual Sustainability Spread Adjustment, and commitment and letter of credit fees also vary with its credit rating and a Sustainability Fee Adjustment. The agreement includes a consolidated total debt to consolidated EBITDA maintenance requirement and customary covenants and events of default. Certain subsidiaries may be designated as borrowers, and there were no borrowings outstanding when the agreement was executed. In connection with this, Xylem terminated its March 1, 2023 five-year $1.0 billion revolving credit facility, which had an accordion feature up to $1.3 billion.
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8-K Event Classification
4 items: 1.01, 1.02, 2.03, 9.01
4 items
Item 1.01
Entry into a Material Definitive Agreement
Business
The company signed a significant contract such as a merger agreement, credit facility, or major partnership.
Item 1.02
Termination of a Material Definitive Agreement
Business
A significant contract was terminated, which may affect business operations or revenue.
Item 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement
Financial
The company incurred a new significant debt or off-balance-sheet obligation.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
New revolving credit facility size: $1,500,000,000
Accordion increase under 2026 facility: $500,000,000
Maximum principal under 2026 facility: $2,000,000,000
+3 more
6 metrics
New revolving credit facility size
$1,500,000,000
Aggregate principal amount under the 2026 Five-Year Revolving Credit Facility
Accordion increase under 2026 facility
$500,000,000
Potential increase permitted for the 2026 Credit Agreement
Maximum principal under 2026 facility
$2,000,000,000
Maximum aggregate principal amount with permitted increases
Prior 2023 revolving facility size
$1,000,000,000
Aggregate principal amount under the terminated 2023 Credit Agreement
Accordion increase under 2023 facility
$300,000,000
Potential increase permitted for the 2023 Credit Agreement
Maximum principal under 2023 facility
$1,300,000,000
Maximum aggregate principal amount with increases under the 2023 facility
Key Terms
Five-Year Revolving Credit Facility Agreement, Term SOFR, EURIBOR, Sustainability Spread Adjustment, +2 more
6 terms
Five-Year Revolving Credit Facility Agreement financial
"entered into a Five-Year Revolving Credit Facility Agreement (the “2026 Credit Agreement”)"
Term SOFR financial
"a base rate or a Term SOFR or EURIBOR rate plus an applicable margin"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
EURIBOR financial
"a base rate or a Term SOFR or EURIBOR rate plus an applicable margin"
Euribor is the benchmark interest rate at which banks in the eurozone lend short-term money to one another and is published for several maturities (overnight to one year). Investors watch it because it forms the baseline for many loans, mortgages, bonds and derivatives—like the temperature reading that helps predict how hot borrowing costs and returns will be across the market.
Sustainability Spread Adjustment financial
"with a further adjustment depending on the Company's annual Sustainability Spread Adjustment"
letter of credit financial
"a quarterly letter of credit fee accruing on the letter of credit exposure"
A letter of credit is a bank’s written promise to pay a seller on behalf of a buyer once specified shipping or delivery documents are presented, acting like a guaranteed cashier’s check that only pays when the agreed conditions are met. Investors care because letters of credit reduce payment and counterparty risk, affect a company’s working capital and credit exposure, and can influence deal certainty in contracts, trade financing, and acquisitions.
consolidated EBITDA financial
"maintain a consolidated total debt to consolidated EBITDA ratio"
Consolidated EBITDA is a measure of a parent company’s total operating earnings across all its subsidiaries, calculated before interest, taxes, depreciation and amortization (non‑cash charges). It shows the group’s raw cash‑generation and operating performance independent of financing and accounting choices, so investors use it like comparing the horsepower of an entire fleet rather than individual cars to judge core profitability and to compare firms on a more even footing.
FAQ
What new credit facility did Xylem Inc. (XYL) enter into on September 8, 2026?
Xylem entered into a Five-Year Revolving Credit Facility Agreement providing a senior unsecured revolving credit facility with aggregate commitments of $1.5 billion, available in U.S. dollars and Euros, arranged by a syndicate of lenders led by Citibank and other major banks.
How large can Xylem’s new revolving credit facility grow under the 2026 Credit Agreement?
The 2026 Credit Agreement allows Xylem to request increases of up to $500 million, subject to lender consent, for a maximum aggregate principal amount of $2.0 billion under the senior unsecured revolving credit facility.
What will Xylem (XYL) use the 2026 revolving credit facility for?
The facility made available by the 2026 Credit Agreement will be used for working capital and other general corporate purposes, providing flexible funding capacity in both U.S. dollars and Euros.
How is interest determined under Xylem’s 2026 Credit Agreement?
Borrowings accrue interest at a rate equal to, at Xylem’s election, a base rate or Term SOFR or EURIBOR plus an applicable margin. The margin is set by a pricing grid based on the company’s credit rating and an annual Sustainability Spread Adjustment.
Does Xylem have any outstanding borrowings under the new 2026 Credit Agreement?
No. The disclosure states that no borrowings are outstanding under the 2026 Credit Agreement on the date of the agreement’s execution.
What happened to Xylem’s prior 2023 revolving credit facility?
In connection with the new facility, Xylem terminated its March 1, 2023 Five-Year Revolving Credit Facility Agreement, which had provided a senior unsecured $1.0 billion revolving credit facility with an accordion feature up to $1.3 billion.
What key financial covenant is included in Xylem’s 2026 Credit Agreement?
The 2026 Credit Agreement requires Xylem to maintain a consolidated total debt to consolidated EBITDA ratio, calculated based on the last four fiscal quarters, along with other customary covenants and events of default.
AI-generated analysis. How Rhea-AI works. Not financial advice.
