Globe Life Inc. (NYSE: NYSE:GL), a prominent life insurance company, has enhanced its financial flexibility by amending its existing credit agreement, resulting in an increase of its revolving credit facility from $750 million to $1 billion. This amendment was effected through a Second Amended and Restated Credit Agreement with Bank of America, N.A. and other lenders, as announced on Monday.
The updated credit agreement, which amends a previous arrangement from September 30, 2021, also grants Globe Life the option to further expand the credit facility to $1.25 billion, subject to lender approval and certain conditions. This potential expansion is capped at two requests per calendar year, with each request requiring a minimum increment of $25 million.
Moreover, the amendment raises the sublimit for same-day swing line loans from $35 million to $50 million and increases the permissible amount of debt and liens for the Federal Home Loan Bank (FHLB) from $1.5 billion to $2.5 billion that Globe Life's insurance subsidiaries may incur.
The maturity date for the credit facility has been extended to March 29, 2029, providing Globe Life with a more extended period for its financial operations. Moreover, the revised agreement has removed the option for Globe Life to enter into an Environmental, Social, and Governance (ESG) amendment.
Under the terms of the credit facility, lenders will provide revolving loans and issue letters of credit up to a $250 million sublimit, which can be either secured or unsecured, for Globe Life or its subsidiary, TMK Re Ltd.
The credit facility may be further extended for two additional one-year periods upon Globe Life's request. This financial arrangement underscores Globe Life's ongoing relationships with the banks involved in the agreement and their affiliates, with whom it has had various commercial and lending interactions.
The detailed terms of the Second Amended and Restated Credit Agreement are outlined in the Form 8-K filed with the SEC, which includes Exhibit 10.1 for reference.
This strategic financial move is based on a press release statement and reflects Globe Life's efforts to strengthen its capital structure and support its operational and strategic initiatives.
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