8-KMaterial AgreementsFinancial EventsOther Events+1

AbbVie Inc. 8-K Report, Material Agreement (Aug 21, 2014)

Filed August 21, 2014For Securities:ABBV

Summary

This AbbVie Inc. (ABBV) 8-K filing from August 2014 reports on significant financing activities related to its anticipated combination with Shire plc. The company entered into a new Term Loan Credit Agreement providing for a £3.2 billion term loan facility and a Revolving Credit Agreement establishing a $4.0 billion revolving credit facility. These agreements, effective August 18, 2014, are crucial for funding the ongoing combination with Shire and demonstrate AbbVie's proactive approach to securing capital for strategic growth initiatives. The filing also includes an amendment to a 364-day bridge credit agreement, further detailing the financing structure for the Shire acquisition. Investors should note that these credit facilities are guaranteed by AbbVie and its related entities, and their terms include various covenants and conditions precedent to drawing funds. The establishment of these credit lines indicates AbbVie's preparedness for the financial requirements of the acquisition, which was a major strategic move for the company at the time.

Key Highlights

  • 1AbbVie entered into a £3.2 billion Term Loan Credit Agreement and a $4.0 billion Revolving Credit Agreement, effective August 18, 2014.
  • 2These credit facilities are intended to support AbbVie's ongoing combination with Shire plc.
  • 3The Term Loan Facility has a maturity of two years from its closing date and carries interest rates dependent on AbbVie's public debt rating.
  • 4The Revolving Credit Facility has a maturity of five years from its closing date and includes provisions for potential commitment reductions.
  • 5Both credit agreements contain customary affirmative and negative covenants, including financial covenants and events of default.
  • 6AbbVie Inc. and New AbbVie are listed as borrowers or guarantors in these agreements, indicating a strategic restructuring of financing.
  • 7An amendment to a 364-Day Bridge Credit Agreement, related to the Shire transaction, was also reported.

Frequently Asked Questions

The primary purpose of these new credit agreements, a £3.2 billion Term Loan Facility and a $4.0 billion Revolving Credit Facility, is to provide financing for AbbVie's anticipated combination with Shire plc. They demonstrate the company's preparedness to fund this significant strategic transaction.

In the Term Loan Credit Agreement, AbbVie Holdings Private Limited (Foreign HoldCo) is the borrower, with AbbVie Inc. and AbbVie Private Limited (New AbbVie) acting as guarantors. For the Revolving Credit Agreement, AbbVie and New AbbVie are the borrowers, with Foreign HoldCo as the guarantor.

The Term Loan Facility has a maturity of two years from its closing date, with interest rates ranging from 0.0% to 0.50% for Base Rate Loans and 0.625% to 1.50% for Eurocurrency Rate Loans, depending on the public debt rating of New AbbVie. The Revolving Credit Facility matures five years from its closing date, with similar interest rate structures tied to the public debt rating.

Yes, advances under both facilities are subject to the satisfaction of certain conditions set forth in their respective agreements. Additionally, the Revolving Credit Facility commitments will terminate if the closing date does not occur before July 31, 2015, and can be automatically reduced upon an 'acquisition cancellation' event.