Summary
Amgen Inc. has entered into a new $4 billion Term Loan Credit Facility on December 22, 2022, comprised of an $2 billion 18-month tranche and a $2 billion 3-year tranche. This facility is specifically designed to finance the acquisition of Horizon Therapeutics plc, including transaction consideration, repayment of Horizon's existing debt, and associated fees and expenses. This financing action indicates a significant step forward in Amgen's strategic pursuit of Horizon Therapeutics. The new term loan will replace and reduce commitments under a previously established bridge credit facility. Investors should monitor the progress of the Horizon acquisition and its impact on Amgen's leverage and future cash flow, as the loan terms include covenants related to interest coverage ratios and debt limitations.
Key Highlights
- 1Amgen secured a $4 billion Term Loan Credit Facility to fund its acquisition of Horizon Therapeutics.
- 2The facility consists of two tranches: an $2 billion 18-month term loan and a $2 billion 3-year term loan.
- 3The loan proceeds will be used for acquisition consideration, Horizon's debt repayment, and transaction-related expenses.
- 4This new credit facility will lead to a corresponding reduction in Amgen's existing Bridge Credit Facility commitments.
- 5The loan carries variable interest rates based on SOFR or a base rate, plus a spread dependent on Amgen's debt rating.
- 6Amgen must maintain a minimum consolidated interest coverage ratio (EBITDA to total interest expense).
- 7Customary covenants regarding mergers, liens, affiliate transactions, and subsidiary indebtedness are included.