Baxter International Inc.
10/04/2021 | Press release | Distributed by Public on 10/04/2021 04:05
Credit Agreements U.S. $4,000,000,000 Term Loan Credit Agreement (Form 8-K)
Credit Agreements
U.S. $4,000,000,000 Term Loan Credit Agreement
On September 30, 2021, Baxter International Inc. ("Baxter") entered into a new term loan credit agreement (the "Term Loan Credit Agreement") among Baxter, as Borrower, various lenders and JPMorgan Chase Bank, National Association, as Administrative Agent, pursuant to which a syndicate of financial institutions have committed to provide Baxter with a senior unsecured term loan facility in an aggregate principal amount of $4.0 billion, consisting of $2 billion in commitments to provide loans with a three-year maturity and $2 billion in commitments to provide loans with a five-year maturity.
The aggregate principal amount of the commitments under the Term Loan Credit Agreement have replaced a corresponding amount of the commitments in respect of the $11.4 billion 364-daysenior unsecured bridge term loan facility previously described in Baxter's Current Report on Form 8-Kfiled on September 2, 2021 (the "Announcement 8-K"), in accordance with the terms of the bridge facility commitment letter. As a result, there are now $7.4 billion in bridge facility commitments remaining. Baxter expects to replace these remaining commitments with cash on the balance sheet and/or permanent financing in the form of the issuance of debt securities prior to the closing of the proposed acquisition of Hill-RomHoldings, Inc. ("Hillrom") previously described in the Announcement 8-K(the "Merger").The Term Loan Credit Agreement enables Baxter to borrow funds in U.S. Dollars on an unsecured basis on the closing date of the Merger in order to fund, in part, the Merger and related transactions, and pay fees and expenses related to the Merger and related transactions. The availability of loans under the Term Loan Credit Agreement is subject to the satisfaction or waiver of certain conditions that are substantially consistent with the conditions to the funding of the bridge facility, including (i) the closing of the Merger substantially concurrently with the funding of such loans, (ii) the absence of a material adverse effect with respect to Hillrom since September 1, 2021, (iii) the truth and accuracy in all material respects of certain representations and warranties, (iv) the receipt of certain certificates and (v) the receipt of certain financial statements. Loans under the Term Loan Credit Agreement will bear interest at variable rates, and will be subject to amortization at an annual rate of 0.625% for the first year and 1.25% thereafter (with loans outstanding under the five-year tranche subject to amortization at an annual rate of 1.875% after the second anniversary of the commencement of amortization and 2.500% after the third anniversary of the commencement of amortization). Baxter is also required to pay a ticking fee that will accrue on the aggregate undrawn commitments under the Term Loan Credit Agreement at a per annum rate based upon Baxter's long-term debt rating in effect from time to time.
The Term Loan Credit Agreement contains financial and other covenants, including a net leverage ratio covenant, as well as events of default with respect to Baxter and in some circumstances its Material Subsidiaries that are customary for facilities of this type.
The description above is a summary of the Term Loan Credit Agreement and is qualified in its entirety by the complete text of the Term Loan Credit Agreement, a copy of which is attached to this report as Exhibit 10.1 and incorporated herein by reference. Capitalized terms used under this "U.S. $4,000,000,000 Term Loan Credit Agreement" subsection that are not defined herein have the meanings given to them in the Term Loan Credit Agreement.
U.S. $2,500,000,000 Five-Year Credit Agreement
On September 30, 2021, Baxter entered into a $2.5 billion, five-year revolving credit agreement (the "USD Revolving Credit Agreement") among Baxter, as Borrower, various lenders and JPMorgan Chase Bank, National Association, as Administrative Agent. Baxter may, at its option, seek to increase the aggregate commitment under the USD Revolving Credit Agreement by up to $1.25 billion, which would result in a maximum aggregate commitment of up to $3.75 billion.
The USD Revolving Credit Agreement enables Baxter to borrow funds in U.S. Dollars on an unsecured basis at variable interest rates and contains financial and other covenants, including a net leverage ratio covenant, as well as events of default with respect to Baxter and in some circumstances its Material Subsidiaries that are customary for facilities of this type. The USD Revolving Credit Agreement also provides for the issuance of letters of credit.
The obligations of the lenders under the USD Revolving Credit Agreement to provide advances will terminate on the earlier of (i) September 30, 2026 and (ii) the date on which the Commitments shall have been reduced to zero or terminated in whole pursuant to the terms of the USD Revolving Credit Agreement, including at the option of banks holding a majority of the commitments during the existence of an event of default.
The description above is a summary of the USD Revolving Credit Agreement and is qualified in its entirety by the complete text of the USD Revolving Credit Agreement, a copy of which is attached to this report as Exhibit 10.2 and incorporated herein by reference. Capitalized terms used under this "U.S. $2,500,000,000 Five-Year Credit Agreement" subsection that are not defined herein have the meanings given to them in the USD Revolving Credit Agreement.
The USD Revolving Credit Agreement replaces Baxter's $2.0 billion five-year revolving credit agreement dated as of December 20, 2019, which was terminated on September 30, 2021 contemporaneously with entry into the USD Revolving Credit Agreement.
Amendment to Existing €200,000,000 Credit Agreement
On October 1, 2021, Baxter Healthcare SA and Baxter World Trade SRL (the "Euro Borrowers") and their existing lender group entered into a first amendment (the "Euro Amendment") to the existing €200 million revolving credit facility, dated as of December 20, 2019 (the "Existing Euro Revolving Credit Agreement" and, as amended by the Euro Amendment, the "Euro Revolving Credit Agreement"), among the Euro Borrowers, as Borrowers, various lenders, and J.P. Morgan AG, as Administrative Agent. In connection with the Euro Amendment, Baxter amended and restated its guaranty of the borrowers' obligations under the Euro Revolving Credit Agreement (as amended, the "Baxter Guaranty"). The purpose of the First Amendment was to (i) extend the maturity date of the Euro-denominated revolving credit facility for an additional five years, (ii) amend the financial covenant applicable to Baxter under the Baxter Guaranty to increase the permitted maximum leverage ratio from 3.75 to 1.0 to 5.00 to 1.0 for a specified period following consummation of the Merger, subject to certain mandatory step-downs, and (iii) make certain other changes to conform to the terms of the Term Loan Credit Agreement and USD Revolving Credit Agreement.
The description above is a summary of the Euro Revolving Credit Agreement and the Baxter Guaranty and is qualified in its entirety by the complete text of the Euro Revolving Credit Agreement, a copy of which is attached to this report as Exhibit 10.3 and incorporated herein by reference, and the Baxter Guaranty, a copy of which is attached to Exhibit 10.3 as Exhibit 4.01 thereunder and incorporated herein by reference. Capitalized terms used under this "Amendment to Existing €200,000,000 Credit Agreement" subsection that are not defined herein have the meanings given to them in the Euro Revolving Credit Agreement.
Termination of a Material Definitive Agreement
The disclosure provided under "Credit Agreements" in Item 1.01 of this Form 8-Kis hereby incorporated by reference into this Item 1.02.
Creation of a Direct Financial Obligation or an Obligation under an Off-BalanceSheet Arrangement of a Registrant.
The disclosure provided under "Credit Agreements" in Item 1.01 of this Form 8-Kis hereby incorporated by reference into this Item 2.03.
Financial Statements and Exhibits.
(d) Exhibits.
| 10.3 | First Amendment, dated as of October 1, 2021, to the Credit Agreement, dated as of December 20, 2019, among Baxter Healthcare SA and Baxter World Trade SRL, as Borrowers, J.P. Morgan AG, as Administrative Agent and certain other financial institutions named therein. | |
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