Summary
Amgen Inc. (AMGN) announced on December 2, 2011, the execution of a new, substantial revolving credit agreement totaling $2.5 billion. This facility, with Citibank, N.A. as administrative agent and JPMorgan Chase Bank, N.A. as syndication agent, is primarily intended to serve as a liquidity backstop for Amgen's commercial paper program and for general corporate purposes. The agreement includes provisions for an upsize option of an additional $500 million and has an initial term of five years, with potential extensions. Concurrently with entering into this new credit agreement, Amgen terminated its prior $2.3 billion revolving credit facility. This strategic move indicates a proactive approach to managing its liquidity and capital structure, potentially reflecting confidence in its financial position and operational needs. The new facility's terms, including interest rates tied to debt ratings and a leverage covenant, suggest a focus on maintaining financial flexibility and adhering to prudent financial management.
Key Highlights
- 1Amgen entered into a new $2.5 billion revolving credit agreement on December 2, 2011.
- 2The new credit facility will serve as a liquidity backstop for Amgen's commercial paper program and general corporate purposes.
- 3The agreement allows for an increase in commitments by up to $500 million at Amgen's request.
- 4The initial term of the credit facility is five years, with potential for two one-year extensions.
- 5Interest rates are variable, based on either LIBOR/EURIBOR or a base rate, plus a spread dependent on Amgen's senior long-term unsecured debt rating.
- 6A commitment fee will be paid on committed funds, ranging from 0.06% to 0.20% annually based on debt rating.
- 7Amgen terminated its previous $2.3 billion revolving credit facility upon entering into the new agreement.