8-KMaterial AgreementsFinancial EventsExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Material Agreement (Jan 22, 2019)

Filed January 22, 2019For Securities:BMYCELG-RIBMYMP

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.

Frequently Asked Questions

The primary purpose of the $8.0 billion Term Loan Agreement is to finance the previously announced merger between Bristol-Myers Squibb and Celgene Corporation. It replaces and reduces a previously established bridge facility.

The term loan is structured into three tranches: a $1 billion facility maturing in 364 days, a $4 billion facility maturing in three years, and a $3 billion facility maturing in five years. These tranches have different amortization schedules and maturity dates.

Borrowers have the option to incur interest at either a base rate or the Eurodollar rate. The applicable margin, added to the base or Eurodollar rate, varies based on Bristol-Myers Squibb's public ratings for its senior unsecured long-term debt. The agreement also notes that while loans are pre-payable without premium or penalty, breakage costs may apply.

The lenders are obligated to make loans upon the satisfaction or waiver of several conditions. Key among these are the completion of the Celgene merger, the absence of a material adverse effect on Celgene, the accuracy of representations and warranties, and the absence of certain defaults by Bristol-Myers Squibb. Other customary conditions precedent are also detailed in the agreement.