364-Day Credit Agreement

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364-Day Credit Agreement

The 364-day credit agreement is an unsecured revolving agreement under which, funds may be borrowed for supporting any outstanding commercial paper issuances and for various general corporate purposes that includes working capital, acquisitions and capital investments. The 364-day credit agreement comes under the category of a private line of credit. A line of credit is given to a business corporation in return of a commitment fee. The organization can withdraw all of the credit line or a part of the line. The banks providing the 364-day credit agreement services renegotiate the credit line, in case the organization is found in good financial health.

In the tough economic scenarios, when it becomes difficult to access the capital markets; the banks become more conservative about issuing the 364-day credit agreement schemes. In this case, they only extend the credit lines to their top clients. According to the 364-day legal agreement; all the reports and payments should be submitted in a timely manner. Also, the debt should not exceed sixty percent of the total capital. The size of the agreement facility is generally $ 1.0 billion and the maturity period is one year.

364-Day Credit Agreement

364-Day Credit Agreement

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