What is the purpose of the new revolving credit agreement?

The new $2.75 billion revolving credit agreement is intended to provide ongoing liquidity and general corporate purposes for Boston Scientific. It replaces the company's previous 2017 revolving credit agreement, modernizing its credit facilities.

How will the new term loan facility be used?

The $2.0 billion new term loan facility is specifically designed to partially finance the acquisition of BTG plc. This facility offers delayed-draw capabilities, allowing the company to access funds as needed for the acquisition.

Are there any financial covenants associated with these new credit agreements?

Yes, the agreements include a maximum leverage ratio covenant. This ratio is calculated based on adjusted EBITDA. Importantly, the maximum leverage ratio is temporarily permitted to increase for two fiscal quarters following the completion of the BTG Acquisition to allow for greater flexibility during the integration period, before stepping down to the standard level.

What is the maturity date of the new revolving credit agreement and the term loan tranches?

The new revolving credit agreement matures on December 19, 2023, with potential one-year extension options. Tranche 1 of the new term loan facility matures two years from the closing date of the New Term Loan Agreement, while Tranche 2 matures three years from the BTG Acquisition closing date.

BSX 8-K: Material Agreements & Financial Events

Summary

Boston Scientific Corporation (BSX) filed an 8-K on December 20, 2018, to report on significant financing activities that occurred on December 19, 2018. The company entered into a new $2.75 billion revolving credit agreement maturing in five years, with extension options. This new facility replaces a previous 2017 revolving credit agreement. Additionally, BSX secured a new $2.0 billion term loan credit facility to partially finance its previously announced BTG plc acquisition. This new term loan consists of two tranches: a $1.0 billion two-year delayed-draw facility and a $1.0 billion three-year delayed-draw facility. These financing arrangements include customary covenants and events of default. Notably, the agreements stipulate a maximum leverage ratio requirement, which temporarily increases following the consummation of the BTG Acquisition to accommodate the transaction's scale, before gradually stepping down. The company also amended its existing 364-day term loan credit agreement to align definitions and leverage ratio calculations with the new financing for the BTG Acquisition. These actions indicate robust access to capital markets to support strategic growth initiatives.

Key Highlights

1Entered into a new $2.75 billion revolving credit agreement with a five-year maturity (December 19, 2023) and extension options.
2Secured a new $2.0 billion senior unsecured delayed-draw term loan facility to partially finance the BTG plc acquisition.
3The new term loan facility is comprised of a $1.0 billion two-year delayed-draw Tranche 1 and a $1.0 billion three-year delayed-draw Tranche 2.
4Amended existing 364-day term loan credit agreement to align definitions and leverage ratios with the BTG Acquisition.
5The new credit agreements include a maximum leverage ratio covenant, with a temporary increase permitted post-acquisition to facilitate integration.
6Replaced the prior 2017 revolving credit agreement and terminated the Second Amended and Restated Credit and Security Agreement.
7These agreements underscore Boston Scientific's financial flexibility and commitment to funding its strategic acquisition of BTG plc.

BOSTON SCIENTIFIC CORP 8-K Report, Material Agreement (Dec 21, 2018)

Summary

Key Highlights

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