Summary
Boston Scientific Corporation (BSX) announced on April 18, 2012, the execution of a new $2 billion senior unsecured credit facility, replacing its previous credit agreement from June 2010. This move is primarily a refinancing effort, aimed at securing a new, potentially more favorable, lending arrangement. The new facility has a maturity of April 18, 2017, with options for a one-year extension, and offers more competitive interest rates and facility fees compared to the previous agreement, reflecting improvements in the company's credit standing or market conditions. Key terms include variable interest rates based on LIBOR plus an applicable margin determined by credit ratings and leverage ratios, which are currently lower than the prior facility. The agreement imposes covenants requiring the maintenance of a minimum interest coverage ratio of 3.0x and a maximum leverage ratio of 3.5x, with specific provisions for excluding certain charges from these calculations. This refinancing demonstrates Boston Scientific's proactive approach to managing its debt structure and capital access.
Key Highlights
- 1Boston Scientific entered into a new $2 billion senior unsecured credit facility on April 18, 2012.
- 2The new credit facility replaces the company's prior credit agreement dated June 23, 2010.
- 3The facility matures on April 18, 2017, with one-year extension options subject to conditions.
- 4Interest rates and facility fees are generally lower than the previous agreement, reflecting potentially improved credit terms.
- 5The new facility requires BSX to maintain a minimum interest coverage ratio of 3.0x and a maximum leverage ratio of 3.5x.
- 6Certain cash and non-cash charges related to restructurings and litigation can be excluded from covenant calculations, up to specified limits.
- 7The company has terminated its previous 2010 credit facility in conjunction with the new agreement.