8-KMaterial AgreementsFinancial EventsExhibits & Filings

Edwards Lifesciences Corp 8-K Report, Material Agreement (Aug 4, 2011)

Filed August 4, 2011For Securities:EW

Summary

Edwards Lifesciences Corporation (EW) filed an 8-K on August 3, 2011, reporting on significant changes to its credit facilities. The company entered into a new Four-Year Credit Agreement, establishing a $500 million multi-currency unsecured revolving credit facility. This new facility replaces their previous Five-Year Unsecured Revolving Credit Agreement dated September 29, 2006, which was terminated on July 29, 2011. This refinancing indicates the company's proactive management of its financial resources and debt structure. The new credit agreement provides financial flexibility for general corporate purposes and potentially for repaying outstanding amounts from the old agreement. Investors should note the change in the credit facility's term and the inclusion of provisions for potential increases up to an additional $250 million, suggesting confidence in future capital needs and growth.

Key Highlights

  • 1Entered into a new Four-Year Credit Agreement on July 29, 2011.
  • 2Established a $500 million multi-currency unsecured revolving credit facility.
  • 3Terminated the previous Five-Year Unsecured Revolving Credit Agreement dated September 29, 2006.
  • 4The new credit facility can be increased by up to an additional $250 million.
  • 5Borrowings under the new facility will bear interest at variable rates (LIBOR or base rate) plus an applicable margin based on leverage ratio.
  • 6The agreement includes customary covenants, representations, warranties, and events of default, such as leverage and interest coverage ratios.
  • 7Funds from the new credit facility are intended for general corporate purposes and potential repayment of existing obligations.

Frequently Asked Questions

The main purpose of this 8-K filing is to report that Edwards Lifesciences entered into a new material definitive agreement (a Four-Year Credit Agreement) and terminated a previous material definitive agreement (the 2006 Credit Agreement), which are significant changes to the company's financial obligations.

The new facility is a four-year unsecured revolving credit facility with a $500 million capacity, replacing the previous five-year unsecured revolving credit facility that also had a $500 million capacity. The new agreement allows for potential increases of up to $250 million, offering more flexibility.

The new credit agreement includes customary covenants, representations, warranties, and events of default. Specifically mentioned are limitations on liens, incurrence of debt, mergers, and significant asset dispositions, as well as the requirement to comply with a leverage ratio and an interest coverage ratio.

Edwards Lifesciences expects to use the borrowings under the new credit agreement for general corporate purposes, and also to repay any outstanding amounts under the previously terminated 2006 Credit Agreement.