8-KMaterial AgreementsFinancial EventsExhibits & Filings

BECTON DICKINSON & CO 8-K Report, Material Agreement (Mar 23, 2020)

Filed March 23, 2020For Securities:BDX

Summary

Becton, Dickinson and Company (BDX) announced on March 23, 2020, the entry into a 364-Day Term Loan Agreement with Wells Fargo Bank on March 20, 2020. This agreement provides BD with a $1.4 billion senior unsecured term loan facility, which has been fully drawn as of the filing date. The purpose of this financing is to support working capital and general corporate needs. The loan carries a maturity of 364 days from its effectiveness and has variable interest rates tied to LIBOR or a base rate plus an applicable margin. This facility includes customary covenants, notably requiring BD to maintain an interest expense coverage ratio of not less than 4-to-1 and a leverage ratio not greater than 5.25-to-1 initially, stepping down to 4.5-to-1 thereafter. The company has also fully utilized the $1.4 billion facility, indicating a proactive move to secure liquidity during a period of potential economic uncertainty. Investors should monitor BD's leverage and coverage ratios to ensure compliance with the loan covenants.

Key Highlights

  • 1BDX has secured a $1.4 billion senior unsecured term loan facility maturing in 364 days.
  • 2The entire $1.4 billion facility has been borrowed as of the filing date.
  • 3Proceeds are designated for working capital and general corporate purposes.
  • 4The loan agreement includes financial covenants related to interest expense coverage ratio (minimum 4-to-1) and leverage ratio (initially max 5.25-to-1, then 4.5-to-1).
  • 5The loan was entered into on March 20, 2020, and filed via an 8-K on March 23, 2020.
  • 6Wells Fargo Bank, National Association is the administrative agent for the facility.

Frequently Asked Questions

BDX entered into this 364-day term loan facility to secure funds for working capital and general corporate purposes. Given the filing date of March 23, 2020, this action likely reflects a proactive strategy to ensure sufficient liquidity and financial flexibility amidst evolving economic conditions.

The Term Loan Agreement requires BDX to maintain an interest expense coverage ratio of at least 4-to-1 and a leverage ratio not exceeding 5.25-to-1 initially, which is set to decrease to 4.5-to-1 thereafter. Investors should monitor these ratios in future filings to ensure the company remains in compliance.

The loan has a maturity of 364 days from the effectiveness date of the Term Loan Agreement, meaning it is a short-term facility.

Yes, the filing explicitly states that BD has borrowed the full $1.4 billion principal amount under the Term Loan Facility as of the date of the Current Report.