Summary
Boston Scientific Corporation (BSX) has announced the execution of a new $2.25 billion senior unsecured credit facility, referred to as the "2017 Credit Agreement," effective August 4, 2017. This new facility replaces the Company's prior credit agreement from April 2015. The 2017 Credit Agreement provides significant borrowing capacity and a maturity date of August 4, 2022, with potential one-year extensions, offering financial flexibility for the company's operations and strategic initiatives. The refinancing was accompanied by the termination of the previous credit facility. The terms of the new agreement maintain similar interest rates and facility fees compared to the prior agreement, suggesting no immediate change in borrowing costs. A key feature for investors is the inclusion of covenants, most notably a maximum leverage ratio of 3.50x (Consolidated EBITDA basis), with a temporarily elevated ratio of 4.50x allowed following a Qualified Acquisition (>$1 billion), providing headroom for strategic M&A activity.
Key Highlights
- 1Boston Scientific entered into a new $2.25 billion senior unsecured credit facility (2017 Credit Agreement) on August 4, 2017.
- 2The new credit facility replaces the previous credit agreement dated April 10, 2015.
- 3The 2017 Credit Agreement matures on August 4, 2022, with options for one-year extensions.
- 4The facility allows for borrowing up to $2.25 billion in revolving credit loans.
- 5Interest rates and facility fees on the new agreement are comparable to the previous facility.
- 6Key covenant requires maintaining a maximum leverage ratio of 3.50x (Consolidated EBITDA).
- 7A higher leverage ratio of up to 4.50x is permitted for a limited period following a "Qualified Acquisition" exceeding $1 billion.