Summary
Boston Scientific Corporation (BSX) filed an 8-K on April 14, 2015, reporting significant updates to its financing arrangements. The primary event was the entry into a new $2 billion senior unsecured credit facility (the "2015 Credit Agreement"), which refinances an existing facility and matures in April 2020. This new facility provides access to revolving credit loans and includes covenants related to interest coverage and leverage ratios, which are adjusted to accommodate a proposed acquisition. In conjunction with the new credit facility and in anticipation of the acquisition of the American Medical Systems urology portfolio, BSX also secured a $750 million unsecured term loan facility and a $250 million unsecured revolving credit facility. The term loan is specifically for funding the acquisition, expected to close by Q3 2015, while the revolving facility is for general corporate needs. These additional agreements also incorporate similar financial covenants as the main credit facility. The company also amended its 2013 term loan agreement to align its financial covenants with the new arrangements.
Key Highlights
- 1Boston Scientific entered into a new $2 billion senior unsecured credit facility, maturing in April 2020, replacing its prior agreement.
- 2The new credit facility refinances existing debt and provides access to revolving credit loans.
- 3The company secured a $750 million term loan facility and a $250 million revolving credit facility specifically related to its proposed acquisition of the American Medical Systems urology portfolio.
- 4The $750 million term loan is intended to fund the acquisition, which is expected to close by the third quarter of 2015.
- 5The new financing agreements include financial covenants requiring minimum interest coverage and maximum leverage ratios, with adjusted terms around the anticipated acquisition.
- 6The company amended its 2013 term loan credit agreement to ensure consistency in financial covenants with the new credit facilities.