Emergent BioSolutions enters forbearance agreement, amends loans

By Sarah Lizee

Olympia, Wash., March 6 – Emergent BioSolutions Inc. entered into a forbearance agreement and sixth amendment to its credit agreement with Wells Fargo Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The administrative agent and the lenders agreed to forbear from exercising rights and remedies from the occurrence and continuation of specified events of default until 5 p.m. ET on April 30, subject to earlier termination.

The revolving credit lenders can make further loans to the company or other extensions of credit during the forbearance period, subject to certain conditions, including a limit on revolver debt of $270 million.

The forbearance agreement and amendment also changed the interest rate to SOFR plus 650 basis points from SOFR plus 600 bps.

It also changed the mandatory prepayment threshold amount for unrestricted cash and cash equivalents to $100 million from $125 million, and the mandatory principal prepayment amount to 100% of all milestone payments received by the company and its subsidiaries from certain project milestone payments, up from 75% previously.

Emergent BioSolutions Canada Inc. will become a guarantor under the senior secured credit facilities and grant a security lien in all collateral owned by Emergent BioSolutions Canada to the administrative agent.

The company paid a forbearance fee of about $1.2 million.

Emergent BioSolutions is a Gaithersburg, Md.-based life sciences company focused on providing specialty pharmaceutical products and contract development and manufacturing services that address several categories of public health threats.

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