Summary
Becton, Dickinson and Company (BDX) announced on September 6, 2018, the execution of a 364-Day Term Loan Agreement with Wells Fargo Bank, National Association, as administrative agent. This agreement provides BDX with a senior unsecured term loan facility of $750 million. The primary purpose of these new borrowings is to partially refinance the company's existing Three Year Term Loan Agreement, originally dated May 12, 2017. This financing initiative suggests BDX is actively managing its debt structure, likely optimizing its interest expense and leverage profile. The new term loan includes standard covenants, such as maintaining an interest expense coverage ratio of at least 4-to-1 and a leverage ratio capped at 5.75-to-1 initially, stepping down to 5.25-to-1 in April 2019. Investors should monitor these covenants to ensure the company's continued financial health and operational flexibility.
Key Highlights
- 1BDX secured a $750 million, 364-day senior unsecured term loan facility.
- 2The new loan will be used to partially refinance an existing term loan agreement from May 2017.
- 3Wells Fargo Bank, National Association, is acting as the administrative agent for the new loan.
- 4The agreement includes financial covenants: minimum interest expense coverage ratio of 4-to-1.
- 5The agreement includes financial covenants: maximum leverage ratio of 5.75-to-1 (until March 31, 2019), then 5.25-to-1.
- 6Customary events of default are included, with potential acceleration of loans upon breach.