Vertex Pharmaceuticals enters into $500 million five-year revolver

By Sarah Lizee

Olympia, Wash., Sept. 17 – Vertex Pharmaceuticals Inc. entered into a credit agreement on Tuesday with Bank of America, NA as administrative agent, providing for a $500 million senior unsecured revolver, according to an 8-K filing with the Securities and Exchange Commission.

Up to $100 million may be allocated for loans and letters of credit in some currencies other than U.S. dollars.

There is a $500 million accordion feature.

The credit agreement matures on Sept. 17, 2024.

Proceeds may be used for general corporate purposes, including to fund permitted dividends, distributions and acquisitions.

Interest is Libor plus 112.5 basis points to 150 bps, depending on the company’s consolidated leverage ratio.

Loans may be prepaid at par and commitments under the credit agreement may be reduced at any time, in whole or in part, without premium or penalty, except for Libor breakage costs.

The credit agreement contains affirmative and negative covenants, including financial covenants to maintain, subject to some limited exceptions, a consolidated leverage ratio of 3.5 to 1.0, subject to an increase to 4.0 to 1.0 following a material acquisition. Another financial covenant requires a consolidated interest coverage ratio of 2.5 to 1.0.

On Tuesday, the company also terminated and repaid all outstanding obligations under its existing credit agreement dated as of Oct. 13, 2016 with Bank of America as administrative agent.

The pharmaceutical company is based in Boston.

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