UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 15, 2008
THE
DOW CHEMICAL COMPANY
(Exact
name of Registrant as specified in its charter)
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Delaware
(State
or other jurisdiction
of
incorporation)
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1-3433
Commission
File Number
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38-1285128
(IRS
Employer
Identification
No.)
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2030
Dow Center, Midland, Michigan
(Address
of principal executive offices)
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48674
(Zip
code)
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(989)
636-1000
(Registrant’s
telephone number, including area code)
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N.A.
(Former
name or former address, if changed since last
report)
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01
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Entry into a Material
Definitive Agreement
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On
December 15, 2008, K-D Petrochemicals C.V. (“K-Dow”) and its wholly owned
subsidiary K-Dow Petrochemicals B.V. (the “Borrower”), entered into a Credit
Agreement (the “Credit Agreement”) with the lenders party thereto and The Royal
Bank of Scotland plc, as administrative agent. The Dow Chemical
Company (the “Company”) ultimately owns 50% of the equity interests of K-Dow,
which was formed pursuant to the previously-disclosed joint venture formation
agreement (the “JVFA”) dated November 28, 2008, between the Company and
Petrochemical Industries Company (K.S.C.) (“PIC”), a wholly owned subsidiary of
Kuwait Petroleum Corporation.
A
condition precedent to the closing of the joint venture under the JVFA requires
K-Dow and its subsidiaries to secure from third parties financing of at least $2
billion in funded debt, and $1 billion in unfunded debt in the form of a working
capital facility. It is expected that this condition precedent will be satisfied
by securing financings under the Credit Agreement, which provides for a $2.7
billion term loan facility and a $1 billion revolving credit facility. The
proceeds of the borrowings will be used to finance the payment of a special cash
dividend of $1.5 billion to each of the Company and PIC, as partners in the
joint venture, as well as for other general corporate purposes of K-Dow and its
subsidiaries.
The term
loan facility will mature on the second anniversary of the initial funding under
the Credit Agreement and the revolving credit facility will mature on the third
anniversary of the initial funding under the Credit Agreement.
LIBOR
borrowings under the Credit Agreement will bear interest at a rate equal to
LIBOR plus an applicable margin ranging between 1.375% and 3.375%, depending on
the public debt credit ratings of K-Dow or the Borrower, or if no public debt
credit ratings for K-Dow or the Borrower exist, then depending on the ratio of
indebtedness to EBITDA for K-Dow and its subsidiaries. The Credit Agreement
contains certain customary representations and warranties and affirmative and
negative covenants, including certain limitations on the ability of K-Dow and
its subsidiaries, among other things, to incur liens, incur indebtedness, enter
into sale and leaseback transactions, sell or transfer assets or receivables or
engage in mergers or consolidations, and customary events of
default. The Credit Agreement also contains financial covenants with
respect to K-Dow’s and its subsidiaries’ (i) ratio of indebtedness to EBITDA and
(ii) consolidated tangible net worth. In addition, in certain
situations, the Credit Agreement requires mandatory prepayments of the term
loans with the net cash proceeds of asset sales, debt issuances and issuances of
equity interests by K-Dow and its subsidiaries.
The
obligations of the Borrower under the Credit Agreement are guaranteed by K-Dow
and certain of its subsidiaries. The Company is neither an obligor under the
Credit Agreement nor a guarantor under the guaranty agreements.
From time
to time, certain of the lenders or their affiliates provide customary commercial
and investment banking services to the Company. In addition,
affiliates of certain of the lenders are providing advisory services to the
Company in connection with the joint venture.
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Item
2.03
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Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
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The
information set forth in Item 1.01 of this Current Report on Form 8-K is hereby
incorporated by reference in this Item 2.03.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: December
15, 2008
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The
Dow Chemical Company |
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By:
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/s/ WILLIAM
H. WEIDEMAN |
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Name:
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William H.
Weideman |
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Title:
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Vice President and
Controller |
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