On March 9, 2023 Amgen Inc. (the "Company") reported that it has entered into a third amended and restated revolving credit agreement with Citibank, N.A., as administrative agent ("Citibank"), JPMorgan Chase Bank, N.A., as syndication agent, and the other banks party thereto (the "Revolving Credit Agreement"), for a total commitment of $4.0 billion (Filing, Amgen, MAR 9, 2023, View Source [SID1234628510]). Financing under the Revolving Credit Agreement is available for general corporate purposes, including as a liquidity backstop to our commercial paper program. The commitments under the Revolving Credit Agreement may be increased by up to $1.25 billion in the aggregate upon our request at the discretion of the banks and subject to certain customary requirements. The commitments of each bank under the Revolving Credit Agreement have an initial term of five years and may be extended for up to two additional one year periods upon our request at the discretion of the respective banks, subject to certain customary requirements. The Revolving Credit Agreement amends and restates our existing revolving credit agreement dated as of December 12, 2019.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
Advances under the Revolving Credit Agreement will bear interest at an annual rate of, at our option, either (i) Adjusted Term SOFR Rate as defined in the Revolving Credit Agreement (or EURIBOR Rate as defined in the Revolving Credit Agreement for certain advances denominated in Euros) plus between 0.68% and 1.10%, depending on the rating of our senior long-term unsecured debt or (ii) the highest of (A) Citibank’s base commercial lending rate, (B) the overnight federal funds rate plus 0.50%, and (C) one-month Adjusted Term SOFR Rate plus 1.00%, plus between 0.00% and 0.10%, depending on the rating of our senior long-term unsecured debt. We have also agreed to pay a fee for committed funds under the Revolving Credit Agreement, whether used or unused, of between 0.07% and 0.15% per annum depending on the rating of our senior long-term unsecured debt. The Revolving Credit Agreement includes a $300 million sub-limit for issuances of letters of credit.
The Revolving Credit Agreement contains customary affirmative and negative covenants, including limitations on mergers, consolidations and sales of assets, limitations on liens and sales and leasebacks, limitations on transactions with affiliates, and limitations on subsidiary indebtedness. In addition, the Revolving Credit Agreement requires maintenance of a minimum consolidated interest coverage ratio of EBITDA to total interest expense, each on a consolidated basis.
The description of the Revolving Credit Agreement above does not purport to be complete and is qualified in its entirety by reference to the Revolving Credit Agreement, which is filed as Exhibit 10.1 to this report.
Termination of a Material Definitive Agreement.
On December 12, 2022, the Company, Citibank, as administrative agent, Bank of America, N.A. ("Bank of America"), as syndication agent, and Citibank and Bank of America, as lead arrangers and book runners, entered into a bridge credit facility (the "Bridge Credit Facility") (as filed in our Current Report on Form 8-K on December 12, 2022) providing for borrowings of up to $28.5 billion to finance the Company’s acquisition of Horizon Therapeutics plc (the "Acquisition").
The commitments under the Bridge Credit Facility were automatically reduced on December 22, 2022 by the amount of our term loan credit facility (the "Term Loan Credit Facility") (as filed in our Current Report on Form 8-K on December 22, 2022) entered into by the Company, Citibank, as administrative agent, Bank of America, as syndication agent, Citibank, Bank of America, Goldman Sachs Bank USA and Mizuho Bank, Ltd., as lead arrangers and bookrunners, and Goldman Sachs Bank USA and Mizuho Bank, Ltd., as documentation agents, providing for (1) a $2,000,000,000 18-month term loan tranche and (2) a $2,000,000,000 3-year term loan tranche. The commitments under the Bridge Credit Facility were further reduced on March 2, 2023 by the net cash proceeds to the Company from the issuance and sale of senior notes of approximately $23,766,627,500 (the "Senior Note Proceeds"), after deducting underwriters’ discounts and estimated offering expenses payable by the Company (as described in our Current Report on Form 8-K filed on March 2, 2023).
On March 9, 2023, we elected to terminate all remaining outstanding commitments under our Bridge Credit Facility and terminate the Bridge Credit Facility in its entirety in accordance with its terms. In connection with the termination of the Bridge Credit Facility, all accrued and unpaid fees thereunder were paid in full. We elected to terminate the remaining outstanding commitments under our Bridge Credit Facility, as, together with cash on hand, the Senior Note Proceeds, and the commitments under our Term Loan Credit Facility, we have sufficient liquidity to finance the completion of the Acquisition, and the remaining commitments under the Bridge Credit Facility are not needed.