8-KMaterial AgreementsFinancial EventsExhibits & Filings

THERMO FISHER SCIENTIFIC INC. 8-K Report, Material Agreement (Apr 13, 2012)

Filed April 13, 2012For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) has filed an 8-K report on April 12, 2012, detailing the entry into new credit agreements. The company has secured a $1 billion, 5-year senior unsecured revolving credit facility, which can be increased by an additional $500 million. This facility replaces an existing 5-year agreement. Additionally, TMO has entered into a $500 million, 364-day senior unsecured revolving credit facility, replacing a similar prior agreement. These new credit facilities provide significant liquidity for various corporate purposes, including working capital, capital expenditures, acquisitions, stock repurchases, and debt refinancing. The new credit agreements offer flexibility and updated terms compared to the previous ones. The interest rates are variable and dependent on the company's Debt Ratings, with margins for Eurocurrency Rate Loans and Base Rate Committed Loans outlined. Both agreements also include a facility fee based on the aggregate commitments. Covenants are in place, including restrictions on liens, subsidiary debt, fundamental changes, and asset dispositions. A key financial covenant requires maintaining a ratio of Indebtedness to Consolidated EBITDA no greater than 3.50 to 1.00 at the end of each fiscal quarter. The Company has also provided a guaranty for the obligations under the 5-year Credit Agreement.

Key Highlights

  • 1Thermo Fisher Scientific entered into two new senior unsecured revolving credit facilities on April 11, 2012.
  • 2A $1 billion, 5-year credit agreement with an option to increase to $1.5 billion was established.
  • 3A $500 million, 364-day credit agreement was also put in place.
  • 4These facilities replace the company's existing credit agreements of similar tenors and amounts.
  • 5Proceeds from the new credit facilities can be used for working capital, capital expenditures, acquisitions, stock repurchases, and debt refinancing.
  • 6Interest rates on the new facilities are tied to the company's Debt Ratings and vary based on loan type (Eurocurrency or Base Rate).
  • 7A key financial covenant requires maintaining a Debt-to-EBITDA ratio below 3.50 to 1.00.

Frequently Asked Questions

Thermo Fisher Scientific has secured a total new credit capacity of $1.5 billion through a $1 billion, 5-year facility (with a potential $500 million increase) and a $500 million, 364-day facility.

The proceeds can be utilized for a range of general corporate purposes, including working capital, capital expenditures, acquisitions, repurchases of stock and debentures, and the refinancing of existing and future debt.

The interest rates are variable and depend on Thermo Fisher Scientific's Debt Ratings. They are determined by adding a specified margin to either the Eurocurrency Rate or the Base Rate, depending on the type of loan.

A significant financial covenant requires the company to maintain a ratio of Indebtedness to Consolidated EBITDA of no greater than 3.50 to 1.00 at the end of each fiscal quarter.