What was the primary purpose of the new $1.8 billion credit facility?

The primary purpose of the $1.8 billion interim credit facility was to provide immediate funding for McKesson's acquisition of Per-Se Technologies, Inc., covering the merger consideration, refinancing Per-Se's existing debt, and associated transaction costs.

Is the $1.8 billion credit facility a long-term financing solution for McKesson?

No, the $1.8 billion credit facility is an interim solution with a 364-day term. McKesson expects to replace it with permanent bond financing of up to $1.2 billion before the interim facility's maturity date.

What does the mandatory prepayment provision in the interim credit facility mean for investors?

The mandatory prepayment provision means that the interim credit facility will be fully repaid once McKesson secures its permanent bond financing. This indicates a proactive move by the company to replace short-term debt with a longer-term capital structure, reducing immediate financial obligations.

Are there any conflicts of interest with the banks providing the credit facility?

The filing notes that certain lenders and their affiliates have performed and may continue to perform various financial advisory services for McKesson. While standard practice, investors should be aware that these entities have existing commercial relationships with the company.

MCK 8-K: Material Agreements & Financial Events

Summary

McKesson Corporation (MCK) announced on January 26, 2007, the successful closing of its acquisition of Per-Se Technologies, Inc. To finance this significant transaction, McKesson entered into a new $1.8 billion 364-day unsecured interim term credit facility. This facility, provided by Bank of America and Wachovia, will fund the merger consideration, refinance Per-Se's existing debt, and cover related transaction costs.

Key Highlights

1McKesson Corporation successfully completed the acquisition of Per-Se Technologies, Inc. on January 26, 2007.
2A new $1.8 billion, 364-day unsecured interim credit facility was established to fund the acquisition.
3The interim credit facility will be used to pay merger consideration, refinance Per-Se's debt, and cover transaction expenses.
4The interim facility is a temporary measure, expected to be replaced by permanent bond financing of up to $1.2 billion.
5The interim credit facility contains a mandatory prepayment clause triggered upon the closing of permanent financing.
6Existing banking relationships with lenders under the new facility have involved past and potential future financial advisory services.
7McKesson also issued a press release on January 26, 2007, formally announcing the closing of the Per-Se acquisition.

MCKESSON CORP 8-K Report, Material Agreement (Jan 26, 2007)

Summary

Key Highlights

Frequently Asked Questions