Summary
McKesson Corporation (MCK) announced on April 28, 2026, the execution of a new, larger revolving credit facility. This new facility, totaling $5.0 billion, replaces two previous credit agreements with a combined capacity of $5.0 billion. The new agreement extends the maturity date to April 2031, providing enhanced long-term financial flexibility. Crucially, the new credit facility introduces a financial covenant requiring McKesson to maintain a total debt to Consolidated EBITDA ratio of no greater than 4.25x, with a temporary step-up to 4.75x allowed following significant acquisitions. This covenant is important for investors as it sets a clear leverage limit, though it excludes the Medical-Surgical Solutions segment. The company had no outstanding borrowings under its previous facilities at the time of this transition, indicating a proactive approach to its capital structure.
Key Highlights
- 1McKesson entered into a new $5.0 billion revolving credit facility maturing in April 2031.
- 2The new facility replaces previous credit lines totaling $5.0 billion ($1.0 billion 364-day and $4.0 billion five-year).
- 3The company had no outstanding borrowings under the terminated credit facilities.
- 4A new financial covenant requires a total debt to Consolidated EBITDA ratio of no greater than 4.25x.
- 5A temporary step-up in the leverage ratio to 4.75x is permitted after acquisitions involving at least $500 million in cash consideration.
- 6The Medical-Surgical Solutions segment's debt and EBITDA are excluded from the leverage covenant calculation.
- 7The new facility offers flexibility with a sublimit for borrowings in Canadian Dollars, British Pound Sterling, and Euros, and can be increased further.