8-KMaterial AgreementsFinancial EventsExhibits & Filings

AbbVie Inc. 8-K Report, Material Agreement (May 18, 2018)

Filed May 18, 2018For Securities:ABBV

Summary

AbbVie Inc. (ABBV) announced on May 18, 2018, the execution of a new 364-day term loan credit agreement, allowing the company to borrow up to $3 billion on an unsecured basis. This facility provides AbbVie with significant financial flexibility for potential short-term needs or strategic opportunities. The agreement was entered into on May 17, 2018, with Bank of America, N.A. serving as the administrative agent. Investors should note that this is an unsecured credit facility with a maturity of approximately one year from the closing date. The interest rate will be determined by AbbVie's election between a Base Rate Loan (with a 0.0% applicable margin) or a Eurocurrency Rate Loan (with a 0.875% applicable margin). The covenants within the agreement are standard for such financings, indicating a routine corporate action to enhance liquidity.

Key Highlights

  • 1AbbVie secured a new $3 billion unsecured term loan credit agreement.
  • 2The facility has a maturity of 364 days from the closing date.
  • 3This agreement provides increased financial flexibility and liquidity.
  • 4Borrowings can be made on either a Base Rate or Eurocurrency Rate basis.
  • 5The applicable margin for Base Rate Loans is 0.0%, and for Eurocurrency Rate Loans is 0.875%.
  • 6The agreement includes customary affirmative, negative, and financial covenants.
  • 7Bank of America, N.A. is the administrative agent for the credit facility.

Frequently Asked Questions

The primary purpose of this new credit agreement is to provide AbbVie with significant financial flexibility and liquidity by establishing the ability to borrow up to $3 billion on an unsecured basis for a period of approximately one year. This can be used for general corporate purposes or to fund short-term needs and opportunities.

The term loan facility matures and is payable in full on the date that is 364 calendar days after the Closing Date, meaning it is a short-term financing instrument expiring in approximately one year from when the funds are drawn.

AbbVie has the option to borrow under either a Base Rate Loan, which has an applicable margin of 0.0% per annum, or a Eurocurrency Rate Loan, which has an applicable margin of 0.875% per annum. The actual interest rate will also include the respective base or Eurocurrency rate itself.

No, this is an unsecured term loan credit agreement, meaning it is not backed by specific company assets as collateral.