Summary
Bristol-Myers Squibb Company (BMY) has entered into a $8.0 billion Term Loan Agreement, effective January 18, 2019. This new facility replaces and reduces a previously announced $33.5 billion bridge facility. The primary purpose of this new loan is to finance the previously announced merger with Celgene Corporation. The term loan is structured into three tranches: a $1 billion 364-day tranche, a $4 billion three-year tranche, and a $3 billion five-year tranche. Borrowings are unsecured and can bear interest at either a base rate or a Eurodollar rate, with applicable margins dependent on Bristol-Myers Squibb's public debt ratings. The agreement includes customary covenants and events of default related to financial performance, legal compliance, and the successful closing of the Celgene merger.
Key Highlights
- 1BMY secured an $8.0 billion Term Loan Agreement, a portion of which replaces a previously announced bridge facility.
- 2The primary intent of the new loan is to fund the acquisition of Celgene Corporation.
- 3The term loan is divided into three tranches: 364-day ($1 billion), 3-year ($4 billion), and 5-year ($3 billion).
- 4Borrowings under the agreement are unsecured.
- 5Interest rates are tied to either a base rate or the Eurodollar rate, with margins varying based on BMY's public debt ratings.
- 6The loan includes standard covenants and events of default.
- 7The agreement emphasizes conditions precedent for loan funding, including the completion of the Celgene merger.