8-KMaterial AgreementsFinancial EventsExhibits & Filings

BIOGEN INC. 8-K Report, Material Agreement (Feb 3, 2020)

Filed February 3, 2020For Securities:BIIB

Summary

Biogen Inc. has entered into a new $1.0 billion unsecured, five-year revolving credit facility with Bank of America, N.A., as Administrative Agent, and other lenders. This facility replaces their previous agreement and provides flexibility for working capital, capital expenditures, acquisitions, and other general corporate purposes. Importantly, no funds were drawn down at the time of the agreement's closing, indicating strong liquidity for the company. The new credit facility offers interest rates based on either a Eurocurrency Rate (LIBOR) or a Base Rate, plus an applicable margin that varies with Biogen's debt ratings. The facility also includes a commitment fee on unutilized amounts and customary letter of credit fees. A key financial covenant requires Biogen to maintain a consolidated leverage ratio of no more than 3.5 to 1.0, with a temporary allowance to increase to 4.0 to 1.0 in connection with a material acquisition. This new facility demonstrates Biogen's proactive approach to managing its financial resources and maintaining access to capital.

Key Highlights

  • 1Biogen entered into a new $1.0 billion, five-year unsecured revolving credit facility on January 28, 2020.
  • 2The facility provides financial flexibility for working capital, capital expenditures, acquisitions, and other corporate needs.
  • 3No funds were drawn down at the closing of the new credit agreement, suggesting ample existing liquidity.
  • 4Interest rates are tied to LIBOR or a Base Rate, with applicable margins dependent on Biogen's debt ratings.
  • 5A financial covenant requires maintaining a consolidated leverage ratio of 3.5 to 1.0, with a potential temporary increase to 4.0 to 1.0 for acquisitions.
  • 6The existing credit agreement dated August 28, 2015, was terminated simultaneously, with no outstanding obligations at that time.

Frequently Asked Questions

The $1.0 billion revolving credit facility is intended to provide Biogen with financial flexibility for various corporate purposes, including working capital, capital expenditures, acquisitions, and other general corporate needs.

No, Biogen did not draw down any proceeds from the Revolving Credit Facility as of the closing date of the Credit Agreement. This indicates the company likely had sufficient existing liquidity.

Borrowings will bear interest at a rate per annum equal to a Eurocurrency Rate (such as LIBOR) or a Base Rate, plus an applicable margin. The margin, which ranges from 0.000% to 1.375% depending on the borrowing type and currency, is influenced by Biogen's senior unsecured long-term debt ratings from Standard & Poor's or Moody's.

Yes, the Credit Agreement includes a financial covenant requiring Biogen to maintain a maximum consolidated leverage ratio of 3.5 to 1.0 at the end of each fiscal quarter. This ratio can temporarily increase to 4.0 to 1.0 if Biogen undertakes a material acquisition, subject to certain limitations.