What is the primary purpose of this $1.0 billion term loan?

The primary purpose of the $1.0 billion term loan agreement is to finance a portion of the cash consideration required for Becton, Dickinson and Company's (BDX) pending acquisition of CareFusion Corporation.

What are the key financial covenants associated with this loan?

The term loan agreement requires BDX to maintain a ratio of consolidated EBITDA to interest expense of not less than 5.00:1.00 and a ratio of Debt to EBITDA of no more than 4.75:1.00, as measured at the end of each fiscal quarter following the loan's closing.

What is the maturity date or term of this loan?

This is a 364-day term loan, meaning the loans under the facility will be due and payable within one year of borrowing.

What conditions must be met before BDX can borrow under this term loan?

Borrowing is subject to several conditions precedent, including the consummation of the CareFusion merger, the absence of certain material adverse effects on CareFusion since June 30, 2014, the delivery of required information, accuracy of representations and warranties, and the absence of certain defaults.

BDX 8-K: Material Agreements & Financial Events

Summary

Becton, Dickinson and Company (BDX) has filed an 8-K report on December 19, 2014, detailing the execution of a $1.0 billion, 364-day term loan agreement. This facility, primarily arranged by Goldman Sachs Bank USA, is intended to fund a portion of the cash consideration for BDX's previously announced acquisition of CareFusion Corporation. The loan is unsecured and has an interest rate based on either the Eurodollar rate or a base rate, plus specified margins tied to BDX's credit ratings.

Key Highlights

1BDX entered into a $1.0 billion, 364-day term loan agreement on December 19, 2014.
2The proceeds are designated to finance a portion of the cash consideration for the acquisition of CareFusion Corporation.
3The term loan facility is unsecured.
4Interest rates are tied to either the Eurodollar rate (plus 100-175 bps) or a base rate (plus 0-75 bps), depending on BDX's credit ratings.
5The loan includes financial covenants related to consolidated EBITDA to interest expense ratio (not less than 5.00:1.00) and Debt to EBITDA ratio (no more than 4.75:1.00).
6Key lenders and agents include Goldman Sachs Bank USA and J.P. Morgan Securities LLC.
7Borrowing is contingent upon the consummation of the CareFusion merger and other customary conditions.

BECTON DICKINSON & CO 8-K Report, Material Agreement (Dec 19, 2014)

Summary

Key Highlights

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