Summary
Becton, Dickinson and Company (BD) has entered into a new Five Year Credit Agreement, effective January 29, 2016, with Citibank, N.A. This agreement replaces a prior credit facility and significantly enhances the company's financial flexibility. The new facility provides BD with $1.5 billion in revolving credit, with an option to increase it by an additional $500 million to a total of $2 billion. This provides substantial liquidity for general corporate purposes. Key terms of the new agreement include a maturity in January 2021 and a single financial covenant requiring an interest expense coverage ratio of at least 5-to-1. The credit facility also includes a $100 million letter of credit subfacility. Importantly, there were no outstanding borrowings under the previous credit agreement, indicating a smooth transition and no immediate debt implications from this refinancing.
Key Highlights
- 1BD entered into a new $1.5 billion senior unsecured revolving credit facility maturing in January 2021.
- 2The new credit facility replaced a prior $1 billion agreement.
- 3The company has the option to increase the total commitment under the facility by an additional $500 million, up to a maximum of $2 billion.
- 4Borrowings under the facility can be used for general corporate purposes, enhancing financial flexibility.
- 5A key financial covenant requires BD to maintain an interest expense coverage ratio of not less than 5-to-1.
- 6The new agreement includes a $100 million letter of credit subfacility.
- 7There were no outstanding borrowings under the prior credit agreement at the time of termination.