01—Abstract
Summary
Summary of the 8-K filed May 28, 2026. Cited figures are marked; the original filing is the authoritative source.
On May 22, 2026, Royalty Pharma plc, Royalty Pharma Holdings Ltd (RPH), and Royalty Pharma Manager, LLC (RPM) entered into a new Revolving Credit Agreement with Bank of America, N.A., as Administrative Agent, and the other lenders party to it.
The Company is the borrower, and RPH and RPM are guarantors. The agreement refinanced and replaced in its entirety the Revolving Credit Agreement dated September 15, 2021. All obligations under that existing facility were repaid and its commitments were terminated at the effective date of the new agreement.
The new facility is an unsecured revolving credit line of $1.8 billiona. Borrowings bear interest at either a base rate or a SOFR-based or alternative currency rate, in each case plus an applicable margin, and the unused portion carries a commitment fee set by a pricing grid. The facility matures on May 22, 2031.
The Credit Agreement includes financial covenants requiring a consolidated leverage ratio of funded debt to Adjusted EBITDA at or below 4.00 to 1.00 (or 4.50 to 1.00 following a qualifying material acquisition), a consolidated portfolio cash flow ratio at or below 5.00 to 1.00 (or 5.50 to 1.00 following a qualifying material acquisition), and a consolidated coverage ratio of Adjusted EBITDA to consolidated interest expense at or above 2.50 to 1.00. It also includes customary restrictions on non-obligor indebtedness, liens, and certain merger or fundamental change transactions.
The filing is a refinancing and replacement of an existing facility rather than a new source of capital described in the filing itself. The full terms are set out in Exhibit 10.1, the Revolving Credit Agreement, which is incorporated by reference.
02—Key points
Key Highlights
- Entered a new $1.8 billion unsecured revolving credit facility on May 22, 2026, with Bank of America, N.A. as Administrative Agent.
- The new agreement refinanced and replaced in its entirety the Revolving Credit Agreement dated September 15, 2021; all obligations under the existing facility were repaid and its commitments terminated.
- The Company is the borrower, with Royalty Pharma Holdings Ltd and Royalty Pharma Manager, LLC as guarantors.
- Pricing is based on a base rate or SOFR/alternative currency rates plus an applicable margin, with a commitment fee on the unused portion set by a pricing grid.
- Financial covenants include a maximum consolidated leverage ratio of 4.00 to 1.00 (4.50 to 1.00 after a qualifying material acquisition) and a minimum coverage ratio of 2.50 to 1.00.
- Portfolio cash flow ratio covenant is at or below 5.00 to 1.00 (or 5.50 to 1.00 following a qualifying material acquisition).
- The facility matures on May 22, 2031.
03—Questions
Frequently Asked Questions
What did Royalty Pharma enter into on May 22, 2026?
The Company, Royalty Pharma Holdings Ltd, and Royalty Pharma Manager, LLC entered into a Revolving Credit Agreement with Bank of America, N.A., as Administrative Agent, and the other lenders party to it. The agreement provides an unsecured revolving credit facility of $1.8 billion.
What happened to the prior credit facility?
The new Credit Agreement refinanced and replaced in its entirety the Revolving Credit Agreement dated September 15, 2021. All obligations outstanding under that agreement were repaid, and all its commitments were terminated in full at the new agreement's effectiveness.
How does the new facility's interest rate work?
Borrowers may elect either a base rate, determined by the highest of the administrative agent's prime rate, the federal funds rate plus 0.5%, and Term SOFR plus 1%, or a Daily SOFR, Alternative Currency Term Rate, or Alternative Currency Daily Rate, in each case plus an applicable margin. A commitment fee applies to the unused portion under a pricing grid.
What financial covenants must the Company maintain?
The Company must maintain a consolidated leverage ratio of funded debt to Adjusted EBITDA at or below 4.00 to 1.00 (or 4.50 to 1.00 following a qualifying material acquisition), a consolidated portfolio cash flow ratio at or below 5.00 to 1.00 (or 5.50 to 1.00 following a qualifying material acquisition), and a consolidated coverage ratio of Adjusted EBITDA to consolidated interest expense at or above 2.50 to 1.00. These are calculated with further adjustments set forth in the Credit Agreement.
When does the revolving credit facility mature?
The Revolving Credit Facility will mature on May 22, 2031.
04—Continue