On December 19, 2022 (the "Closing Date"), Regeneron Pharmaceuticals, Inc. ("Regeneron" or the "Company") entered into a credit agreement (the "Credit Agreement") by and among the Company, as a borrower and guarantor; certain direct subsidiaries of the Company, as the initial subsidiary borrowers; the lenders and issuing banks from time to time party thereto; and JPMorgan Chase Bank, N.A., as administrative agent, swingline lender, and an issuing bank (Filing, 8-K, Regeneron, DEC 19, 2022, View Source [SID1234625449]).
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The Credit Agreement provides for a $750 million senior unsecured five-year revolving credit facility (with a $25 million sublimit for swingline borrowings and a $50 million sublimit for letters of credit) (the "Credit Facility") and replaces the Company’s previously existing $750 million revolving credit facility, which was contemporaneously terminated as described in Item 1.02 below. The loans under the Credit Facility have a variable interest rate based on either the Secured Overnight Financing Rate-based rate or the alternate base rate (or other applicable rate with respect to non-dollar borrowings), plus an applicable margin that varies with the Company’s debt rating and total leverage ratio. The Credit Agreement includes an option for the Company to elect to increase the commitments under the Credit Facility and/or to enter into one or more tranches of term loans in the aggregate principal amount of up to $500 million, subject to the consent of the lenders providing the additional commitments or term loans, as applicable, and certain other conditions.
As set forth in the Credit Agreement, the Company has the option to amend the Credit Agreement to establish environmental, social, and governance targets which will be used to adjust pricing under the Credit Facility, subject to parameters to be provided in the amended Credit Agreement.
The proceeds of the loans under the Credit Facility may be used to finance the working capital needs, and for general corporate or other lawful purposes, of Regeneron and its subsidiaries. The Company has guaranteed all obligations under the Credit Facility.
The Credit Agreement contains operating covenants and a maximum total leverage ratio financial covenant. Operating covenants include, among other things, limitations on (i) the incurrence of indebtedness by the Company’s subsidiaries, (ii) liens on assets of the Company and its subsidiaries, and (iii) certain fundamental changes and the disposition of assets by the Company and its subsidiaries. The Credit Agreement contains other customary covenants, representations and warranties, and events of default.
The Credit Facility matures, and all amounts outstanding thereunder will become due and payable in full, on December 19, 2027. The Credit Agreement includes an option for the Company to elect to extend the maturity date of the Credit Facility, subject to the consent of the extending lenders and certain other conditions. Amounts borrowed under the Credit Facility may be prepaid, and the commitments under the Credit Facility may be terminated, at any time without premium or penalty. As of the date of this report, no borrowings were outstanding under the Credit Facility.
The foregoing summary of the Credit Agreement is qualified in its entirety by the full text of the Credit Agreement, which is attached as Exhibit 10.1 hereto and is incorporated herein by reference.