Wabtec Opens A $2 Billion Commercial Paper Program, Backed By Ten Subsidiaries
The Pittsburgh-based rail equipment company filed an 8-K Thursday disclosing a new short-term borrowing facility capped at $2 billion outstanding at any time.
Westinghouse Air Brake Technologies — known as Wabtec — put a new short-term funding channel in place Thursday, establishing a commercial paper program capped at $2 billion in notes outstanding at any one time, according to an 8-K filed with the SEC. The notes will be backed by unconditional guarantees from ten of the company's subsidiaries.
What The Filing Says
The 8-K, filed Thursday and accepted by the SEC at 4:02 p.m. ET, discloses that Wabtec may issue short-term, unsecured commercial paper notes from time to time under the program, so long as the total outstanding does not exceed $2 billion at any point.
The notes will carry maturities of up to 397 days from the date of issuance. They will be sold at a discount from par or at par, with interest rates set at the time of each individual issuance — standard terms for the commercial paper market.
One or more commercial paper dealers will operate under the program, either purchasing the notes directly from Wabtec or arranging their sale to outside buyers. A national bank will serve as the issuing and paying agent. As of the filing date, Wabtec had not yet issued any notes under the program.
The 8-K was signed by John A. Olin, Wabtec's Executive Vice President and Chief Financial Officer.
Ten Subsidiaries On The Hook
Payment on every note issued under the program will be unconditionally guaranteed by ten Wabtec subsidiaries. The filing names them as: GE Transportation, a Wabtec Company; RFPC Holding Corp.; Transportation IP Holdings, LLC; Transportation Systems Services Operations Inc.; Wabtec Components LLC; Wabtec Holding, LLC; Wabtec Railway Electronics Holdings, LLC; Wabtec Transportation Systems, LLC; and Wabtec US Rail, Inc.
The breadth of the guarantee structure — spanning nine distinct legal entities plus GE Transportation — means that repayment obligations are spread across a significant portion of Wabtec's corporate family, rather than sitting solely on the parent company's balance sheet.
Private Placement, Qualified Buyers Only
The notes and their guarantees will not be registered under the Securities Act of 1933 or any state securities laws. Instead, they will be issued as private placements under the exemption from registration contained in Section 4(a)(2) of the Securities Act — meaning they can only be offered or sold to qualified buyers absent a separate registration.
The dealer agreements governing the program contain customary representations, warranties, covenants, and indemnification provisions, the filing states.
WAB shares were unchanged at $287.84 in Thursday after-hours trading following the disclosure.
The next thing to watch is whether Wabtec draws on the facility: any initial note issuance would represent the first actual use of the $2 billion capacity the company put in place Thursday.
