AMERICAN HONDA FINANCE CORP 8-K

What Happened

• AMERICAN HONDA FINANCE CORP (AHFC) announced on Feb 20, 2026 that it entered into three unsecured revolving credit agreements — a 364‑day facility, a three‑year facility and a five‑year facility — with aggregate commitments of $8,500,000,000 (each facility providing roughly $2.8333 billion). The agreements replace AHFC’s prior 2022 credit facilities that were scheduled to terminate in February 2026.
• As of the filing (Feb 24, 2026) no amounts were drawn under the new credit agreements. Borrowings may be priced at a base rate or a SOFR‑based rate (Term SOFR or Daily Simple SOFR) plus a margin that varies with AHFC’s senior unsecured credit rating. The agreements include customary covenants and events of default, including requirements to maintain a positive consolidated tangible net worth and cross‑default provisions tied to Honda Motor Co., Ltd. (HMC) ownership and the Keep Well Agreement.

Key Details

• Total new commitments: $8,500,000,000 across three unsecured revolving facilities ($2,833,333,333.34 for the 364‑day facility; $2,833,333,333.33 for the three‑year and five‑year facilities).
• Effective dates and expirations: facilities entered Feb 20, 2026; 364‑day facility expires Feb 19, 2027 (unless extended), three‑year expires Feb 20, 2029, five‑year expires Feb 20, 2031.
• Replaced Existing Credit Agreements from 2022 (previous aggregate commitments: $7.0B — $3.5B, $2.1B, $1.4B); AHFC incurred no outstanding borrowings or termination penalties on replacement.
• Interest mechanics: option of base rate (highest of federal funds +0.50%, WSJ Prime, or 1‑month Term SOFR +1.00%) or SOFR‑based rates (Term SOFR or Daily Simple SOFR); all rates floored at 0.00% with benchmark transition language included.

Why It Matters

• Liquidity and flexibility: The new $8.5B combined revolvers give AHFC committed, unsecured liquidity across short, medium and longer maturities, supporting general corporate purposes and funding flexibility without immediate draws.
• Credit and covenant exposure: Borrowing costs will vary with AHFC’s credit rating and prevailing SOFR/base rates. The agreements include customary covenants and cross‑default triggers tied to HMC ownership and the Keep Well Agreement; these provisions could accelerate defaults under certain parent‑company changes or if the Keep Well Agreement becomes unenforceable.
• Investor takeaway: This is a financing and liquidity update — not an earnings or corporate‑governance event — indicating AHFC has refreshed and expanded its committed credit lines with large global banks under updated benchmark and maturity terms.