01—Abstract
Summary
Summary of the 8-K filed April 28, 2025. Cited figures are marked; the original filing is the authoritative source.
United Therapeutics Corporation entered into a new Credit Agreement dated April 25, 2025 with a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent and swingline lender.
The facility is an unsecured revolving credit facility of up to $2.5 billion, which may be increased by up to $750 milliona in the aggregate subject to lender commitments and other conditions. It matures five years after closing, with lenders able to extend their commitments by one year on request, up to two such extensions. At closing, the company borrowed $200.0 million under the new facility and used the proceeds to repay all outstanding obligations under its 2022 Credit Agreement, dated March 31, 2022, with Wells Fargo.
The filing states there were no penalties for the early termination of the 2022 Credit Agreement. Loans bear interest at either an adjusted Term SOFR rate or a fluctuating base rate, plus an applicable margin set quarterly based on the consolidated total leverage ratio. Proceeds may be used to refinance existing indebtedness and for working capital and general corporate purposes.
The Credit Agreement includes customary covenants and events of default, including a change of control. Financial maintenance covenants require a consolidated ratio of total indebtedness to EBITDA not greater than 3.50 to 1.00 at each fiscal quarter end (temporarily increasable to 4.00 to 1.00 after qualifying acquisitions or inbound licensing transactions), and a consolidated interest coverage ratio of at least 3.00 to 1.00. As of April 25, 2025, no subsidiaries were required to guarantee the obligations, though subsidiaries may be required to do so in the future.
02—Key points
Key Highlights
- New unsecured revolving credit facility of up to $2.5 billion, expandable by up to $750 million in aggregate
- Facility matures five years after closing, with up to two one-year extensions available at lender election
- $200.0 million borrowed at closing on April 25, 2025, used to repay the 2022 Credit Agreement
- The 2022 Credit Agreement with Wells Fargo was terminated with no early termination penalties
- Interest priced at adjusted Term SOFR or base rate plus a margin tied to the consolidated total leverage ratio
- Financial covenants include maximum total indebtedness to EBITDA of 3.50 to 1.00 and minimum interest coverage of 3.00 to 1.00
- Agreement includes a change of control event of default; no subsidiary guarantors as of April 25, 2025
03—Questions
Frequently Asked Questions
How large is the new credit facility and can it be expanded?
The Credit Agreement provides an unsecured revolving credit facility of up to $2.5 billion. The facility may be increased by up to $750 million in the aggregate, subject to obtaining commitments from existing or new lenders and other conditions.
Why did United Therapeutics enter into this agreement?
The proceeds are available to refinance certain existing indebtedness and for working capital and other general corporate purposes. At closing, the company borrowed $200.0 million and used the funds to repay its outstanding obligations under the 2022 Credit Agreement.
What is the maturity of the facility?
The facility matures five years after the closing date. Lenders may elect to extend their commitments by one year following a company request, for up to a maximum of two such extensions.
What financial covenants must the company maintain?
As of each fiscal quarter end, the consolidated ratio of total indebtedness to EBITDA must not exceed 3.50 to 1.00, which may increase to 4.00 to 1.00 following certain qualifying acquisitions or inbound licensing transactions. The consolidated interest coverage ratio must not be less than 3.00 to 1.00.
Are there any penalties for the early termination of the prior credit agreement?
No. The filing states there were no penalties associated with the early termination of the 2022 Credit Agreement, which was paid off and terminated on April 25, 2025.
04—Continue