Debt and Credit Facilities

12 Months Ended

Jan. 04, 2020

Debt and Credit Facilities

Debt and Credit Facilities

Note 10. Debt and Credit Facilities

Our debt is summarized in the table below:

	January 4,		December 29,
(In millions)	2020		2018
Manufacturing group
7.25% due 2019	$	—	$	250
6.625% due 2020		199		190
Variable-rate notes due 2020 (2.45% and 3.17%, respectively)		350		350
3.65% due 2021		250		250
5.95% due 2021		250		250
4.30% due 2024		350		350
3.875% due 2025		350		350
4.00% due 2026		350		350
3.65% due 2027		350		350
3.375% due 2028		300		300
3.90% due 2029		300		—
Other (weighted-average rate of 3.01% and 2.63%, respectively)		75		76
Total Manufacturing group debt	$	3,124	$	3,066
Less: Current portion of long-term debt		(561)		(258)
Total Long-term debt	$	2,563	$	2,808
Finance group
Variable-rate note due 2020 (2.87% and 3.57%, respectively)	$	150	$	150
2.88% note due 2022		150		150
Fixed-rate notes due 2019-2028 (weighted-average rate of 3.20% and 3.17%, respectively) (a) (b)		65		84
Variable-rate notes due 2019-2027 (weighted-average rate of 3.31% and 3.99%, respectively) (a) (b)		22		35
Fixed-to-Floating Rate Junior Subordinated Notes (3.64% and 4.35%, respectively)		299		299
Total Finance group debt	$	686	$	718

(a) Notes amortize on a quarterly or semi-annual basis.

(b) Notes are secured by finance receivables as described in Note 4.

The following table shows required payments during the next five years on debt outstanding at January 4, 2020:

(In millions)	2020		2021		2022		2023		2024
Manufacturing group	$	561	$	507	$	7	$	7	$	361
Finance group		167		14		167		17		15
Total	$	728	$	521	$	174	$	24	$	376

On October 18, 2019, Textron entered into a senior unsecured revolving credit facility for an aggregate principal amount of $1.0 billion, of which up to $100 million is available for the issuance of letters of credit. Textron may elect to increase the aggregate amount of commitments under the facility to up to $1.3 billion by designating an additional lender or by an existing lender agreeing to increase its commitment. The facility expires in October 2024, subject to up to two one-year extensions at Textron's option with the consent of lenders representing a majority of the commitments under the facility. This new facility replaced the prior 5-year facility, which was scheduled to expire in September 2021. At January 4, 2020 and December 29, 2018, there were no amounts borrowed against either facility. At January 4, 2020, there were $10 million of outstanding letters of credit issued under the new facility and at December 29, 2018, there were $10 million of outstanding letters of credit issued under the prior facility.

Fixed-to-Floating Rate Junior Subordinated Notes

The Finance group’s $299 million of Fixed-to-Floating Rate Junior Subordinated Notes are unsecured and rank junior to all of its existing and future senior debt. The notes mature on February 15, 2067; however, we have the right to redeem the notes at par at any time and we are obligated to redeem the notes beginning on February 15, 2042.  Interest on the notes was fixed at 6% through February 15, 2017 and is now variable at the three-month London Interbank Offered Rate + 1.735%.

Support Agreement

Under a Support Agreement, as amended in December 2015, Textron Inc. is required to ensure that TFC maintains fixed charge coverage of no less than 125% and consolidated shareholder’s equity of no less than $125 million. There were no cash contributions required to be paid to TFC in 2019, 2018 and 2017 to maintain compliance with the support agreement.