8-KMaterial AgreementsFinancial EventsExhibits & Filings

AbbVie Inc. 8-K Report, Material Agreement (Mar 30, 2015)

Filed March 30, 2015For Securities:ABBV

Summary

AbbVie Inc. (ABBV) filed an 8-K on March 30, 2015, to report the entry into a 364-Day Bridge Term Loan Credit Agreement on March 27, 2015. This agreement provides AbbVie with an $18.0 billion credit facility intended to finance its previously announced acquisition of Pharmacyclics, Inc. The facility allows for two potential borrowings, with the primary borrowing to occur upon the consummation of the acquisition. Proceeds can also be used for related expenses and stock repurchases. This significant debt financing underscores AbbVie's commitment to the Pharmacyclics acquisition. Investors should note the substantial amount of debt being raised and that the loans mature 364 days after the acquisition closes. The agreement includes customary covenants, such as a financial covenant limiting the ratio of Consolidated Total Debt to Consolidated EBITDA, indicating a focus on maintaining financial flexibility post-acquisition.

Key Highlights

  • 1AbbVie entered into an $18.0 billion 364-Day Bridge Term Loan Credit Agreement on March 27, 2015.
  • 2The credit facility is primarily intended to finance the acquisition of Pharmacyclics, Inc.
  • 3The agreement allows for up to two borrowings, with the first available upon the acquisition's closing.
  • 4A second borrowing of up to $6.0 billion is possible within 60 days after the closing date.
  • 5Proceeds can also fund related fees, expenses, and potential stock repurchases.
  • 6Loans under the agreement mature 364 days after the acquisition closing date.
  • 7The agreement includes a financial covenant related to the ratio of Consolidated Total Debt to Consolidated EBITDA.

Frequently Asked Questions

The primary purpose of the 364-Day Bridge Term Loan Credit Agreement is to finance AbbVie's previously announced acquisition of Pharmacyclics, Inc., along with related fees, expenses, and potential stock repurchases in connection with the acquisition.

AbbVie can request up to two borrowings. The first borrowing, up to the full $18.0 billion, can be drawn on the date the acquisition of Pharmacyclics is consummated, provided certain conditions are met. A second borrowing, up to $6.0 billion (or the remaining commitment), can be made within 60 days after the initial borrowing date.

The loans obtained under the Bridge Loan Agreement mature 364 days after the date the acquisition of Pharmacyclics is consummated (the "Bridge Closing Date").

Yes, the Bridge Loan Agreement contains customary covenants, including a financial covenant that limits AbbVie's ratio of Consolidated Total Debt to Consolidated EBITDA to certain specified ratios on certain dates. This ensures the company maintains a certain level of financial health while carrying this debt.