01—Abstract
Summary
Summary of the 8-K filed June 17, 2024. Cited figures are marked; the original filing is the authoritative source.
On June 17, 2024, Illumina, Inc. entered into a 364-day delayed draw credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, providing a senior unsecured term loan credit facility of up to $750 milliona.
The facility is tied to the company's planned divestment of GRAIL, LLC, and proceeds may be used to fund cash to GRAIL's balance sheet in connection with the GRAIL Transactions. Borrowings bear interest at a variable rate based on either term SOFR or the alternate base rate, plus an applicable rate tied to the company's debt rating, with a 0.10%b per annum credit spread adjustment on term SOFR loans. The current borrowing rate is approximately 6.70%.
The facility can be drawn at any time before the earliest of termination of the GRAIL definitive agreement, consummation of the GRAIL Transactions without funding, May 5, 2025 if the GRAIL Transactions have not occurred by then, or the company's termination notice. As of the filing date no borrowings were outstanding, but the facility is expected to be drawn in full on June 20, 2024, with maturity and repayment due on June 19, 2025. The agreement includes a maximum total leverage ratio financial covenant and operating covenants limiting subsidiary indebtedness, liens, fundamental changes, and asset dispositions, and the company may prepay or terminate commitments without premium other than customary breakage costs.
02—Key points
Key Highlights
- Entered a 364-day delayed draw credit agreement with JPMorgan Chase Bank, N.A. as administrative agent on June 17, 2024
- Senior unsecured term loan facility of up to $750 million available to fund cash to GRAIL, LLC's balance sheet
- Facility is linked to the company's planned divestment of GRAIL (the GRAIL Transactions)
- Current borrowing rate under the facility is approximately 6.70%
- Facility expected to be drawn in full on June 20, 2024, with maturity on June 19, 2025
- Includes a maximum total leverage ratio financial covenant plus operating covenants on subsidiary debt, liens, and asset dispositions
- Availability ends no later than May 5, 2025 if the GRAIL Transactions have not occurred by then
03—Questions
Frequently Asked Questions
What is the size and purpose of the new credit facility?
The Credit Agreement provides a senior unsecured term loan credit facility of up to $750 million. Proceeds may be used to fund cash to the balance sheet of GRAIL, LLC in connection with the company's planned divestment of GRAIL.
What interest rate applies to borrowings?
Loans bear a variable rate based on either term SOFR or the alternate base rate, plus an applicable rate that varies with the company's debt rating. Term SOFR loans also carry a 0.10% per annum credit spread adjustment. The current borrowing rate is approximately 6.70%.
When must the facility be drawn and when does it mature?
The facility can be drawn until the earliest of several events, including termination of the GRAIL definitive agreement, consummation of the GRAIL Transactions without funding, and May 5, 2025 if the GRAIL Transactions have not occurred. It is expected to be drawn in full on June 20, 2024 and to mature on June 19, 2025.
Were any borrowings outstanding as of the filing date?
No. As of the date of the report, no borrowings were outstanding under the Credit Facility.
What restrictions does the credit agreement impose?
The financial covenant is a maximum total leverage ratio. Operating covenants limit the incurrence of indebtedness by subsidiaries, liens on company and subsidiary assets, and certain fundamental changes and asset dispositions. The agreement also contains other customary covenants, representations, warranties, and events of default.
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