8-KMaterial AgreementsFinancial Events

BIOGEN INC. 8-K Report, Material Agreement (Mar 14, 2013)

Filed March 14, 2013For Securities:BIIB

Summary

Biogen Idec Inc. (now Biogen Inc.) announced on March 14, 2013, the entry into a Credit Agreement establishing a $750 million unsecured, revolving credit facility. This facility is a significant financial development, designed to provide funding flexibility for general corporate purposes and other permitted uses. The availability of these funds is contingent upon the successful completion of Biogen's acquisition of TYSABRI® (natalizumab) intellectual property and rights from Elan Pharma International Limited and Elan Pharmaceuticals, Inc., a transaction for which Biogen has confirmed receiving all necessary regulatory approvals. The credit facility has a maturity of 364 days from the closing date and offers Biogen the ability to borrow funds at either a Eurodollar Rate (LIBOR) or a Base Rate, with interest rates tied to the company's debt ratings. The agreement includes standard covenants and a financial covenant requiring Biogen to maintain a maximum consolidated leverage ratio of 3.5 to 1.0. While Biogen is not currently drawing on this facility, it provides a valuable financial resource for future strategic initiatives and operational needs.

Key Highlights

  • 1Biogen Idec Inc. entered into a $750 million unsecured, revolving credit facility.
  • 2The credit facility will be available for general corporate purposes and other permitted uses.
  • 3Access to the credit facility is contingent upon the completion of the TYSABRI® asset acquisition from Elan.
  • 4Biogen has obtained all required regulatory approvals for the TYSABRI® acquisition.
  • 5The facility has a maturity of 364 days from the closing date.
  • 6Borrowing interest rates are based on either a Eurodollar Rate (LIBOR) or a Base Rate, with margins dependent on the company's debt ratings.
  • 7The agreement includes a financial covenant requiring a maximum consolidated leverage ratio of 3.5 to 1.0.

Frequently Asked Questions

The $750 million unsecured, revolving credit facility is intended to provide Biogen with financial flexibility for general corporate purposes and other permitted uses as outlined in the Credit Agreement. It serves as a resource for potential future investments, operational needs, or strategic initiatives.

No, the credit facility is not immediately available. Its activation, or the obligation of lenders to make initial credit extensions, is contingent upon the successful completion of Biogen's acquisition of TYSABRI® (natalizumab) rights from Elan Pharma International Limited and Elan Pharmaceuticals, Inc. Biogen has confirmed it has received all necessary regulatory approvals for this acquisition.

The facility is a $750 million unsecured, revolving credit facility with a maturity of 364 days from the closing date. Interest rates will be based on either the Eurodollar Rate (LIBOR) or a Base Rate, with applicable margins that vary depending on Biogen's senior unsecured long-term debt ratings from S&P or Moody's. The agreement also includes customary covenants and a financial covenant requiring a maximum consolidated leverage ratio of 3.5 to 1.0.

The commitments under the Revolving Credit Facility will automatically terminate if the acquisition closing date does not occur within 120 days of March 14, 2013, or if the Asset Purchase Agreement is terminated or expires prior to the closing date. Biogen must also notify the Administrative Agent within a specified period after receiving regulatory approvals to complete the transactions, or the commitments will terminate.