01—Abstract
Summary
Summary of the 8-K filed September 27, 2024. Cited figures are marked; the original filing is the authoritative source.
On September 27, 2024, Viatris Inc. entered into a Second Amended and Restated Revolving Credit Agreement with certain affiliates and subsidiaries as guarantors, lenders and issuing banks, and Bank of America, N.A. as administrative agent.
The agreement provides a revolving credit facility of up to $3.5 billiona, available in U.S. dollars or alternative currencies including Euro, Sterling, Yen and other approved currencies, subject to customary closing conditions. It includes a $300 million letter of credit subfacility and a $175 million swingline sublimit. Proceeds will be used for general corporate purposes, including repaying obligations under Viatris' existing $4 billion revolving credit facility dated July 1, 2021.
The facility bears interest at SOFR, Eurocurrency or SONIA rates plus 1.10%b per annum, or a base rate plus 0.10%, with a facility fee currently accruing at 0.15% on the aggregate revolving commitments. Margins can fluctuate based on Viatris' long-term unsecured senior, non-credit-enhanced debt ratings from S&P Global Ratings, Moody's Investors Service and Fitch Ratings. The agreement contains customary affirmative and negative covenants and a financial covenant requiring a leverage ratio no greater than 3.75 to 1.00 at each fiscal quarter end after the Closing Date.
The facility is scheduled to expire five years from the Closing Date, and borrowings are due on the same date and may be prepaid without penalty other than customary breakage costs. The filing also notes that Viatris is incorporating the agreement by reference under Item 2.03 as a direct financial obligation, and that the full agreement is filed as Exhibit 10.1, with certain annexes, schedules and exhibits omitted under Item 601(a)(5) of Regulation S-K.
02—Key points
Key Highlights
- Viatris entered into a Second Amended and Restated Revolving Credit Agreement with a total commitment of up to $3.5 billion, with Bank of America, N.A. as administrative agent.
- The facility supports multicurrency borrowings, including Euro, Sterling, Yen and other approved currencies, and includes a $300 million letter of credit subfacility and a $175 million swingline sublimit.
- Proceeds are for general corporate purposes, including repaying amounts outstanding under the existing $4 billion revolving credit facility dated July 1, 2021.
- Pricing is SOFR, Eurocurrency or SONIA plus 1.10% per annum, or base rate plus 0.10%, with a 0.15% facility fee on aggregate revolving commitments; margins can fluctuate with Viatris' credit ratings.
- The financial covenant requires a leverage ratio no greater than 3.75 to 1.00, tested at each fiscal quarter end after the Closing Date.
- The facility expires five years from the Closing Date, and amounts drawn become due on that same date.
- Guarantors as of closing include Mylan Inc., Utah Acquisition Sub Inc. and Mylan II B.V., with other subsidiaries guaranteeing third-party debt over $500 million to join after closing.
03—Questions
Frequently Asked Questions
How large is the new revolving credit facility?
Viatris may obtain extensions of credit under the Revolving Credit Facility in an aggregate principal amount not to exceed $3.5 billion, in U.S. dollars or alternative currencies approved by the Administrative Agent and each lender.
What will the proceeds be used for?
Proceeds will be used for general lawful corporate purposes of Viatris and its subsidiaries, including repaying outstanding obligations under Viatris' existing $4 billion revolving credit facility dated July 1, 2021.
What are the borrowing costs and fees?
Borrowings bear interest at SOFR, the Eurocurrency Rate or SONIA plus 1.10% per annum, or at a base rate plus 0.10% per annum. A facility fee currently accrues at 0.15% on the daily amount of aggregate revolving commitments. Margins can change based on Viatris' long-term unsecured senior, non-credit-enhanced debt ratings from S&P Global Ratings, Moody's and Fitch.
What financial covenant applies to the facility?
The agreement requires Viatris to maintain a leverage ratio no greater than 3.75 to 1.00 as of the last day of each fiscal quarter ending after the Closing Date.
When does the facility mature and can it be repaid early?
The facility is scheduled to expire five years from the Closing Date, and amounts drawn become due on that date. Drawn amounts may be voluntarily prepaid without penalty or premium, other than customary breakage costs on SOFR, Eurocurrency Rate and SONIA borrowings.
04—Continue