Walgreens Boots Alliance secures $2 billion of new credit facilities

By Sarah Lizee

Olympia, Wash., Dec. 6 – Walgreens Boots Alliance, Inc. entered into a credit agreement on Nov. 30 that provides for a $500 million senior unsecured revolving credit facility and a $500 million senior unsecured term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

Sumitomo Mitsui Banking Corp. is the lead arranger and administrative agent.

Borrowings bear interest at Libor plus 75 basis points to 100 bps, and the revolving commitment fee is 11 bps to 15 bps, in each case depending on the company’s index debt ratings.

The facilities will mature on May 30, 2020.

The loans were funded in full at close.

There is a financial covenant requiring that, as of the last day of each fiscal quarter, starting with the first full quarter ending after closing, the ratio of consolidated debt to total capitalization will not be greater than 0.6 to 1, provided that the ratio is subject to increase in some conditions.

In connection with entering into the new agreement, the company terminated its $1 billion existing term loan credit agreement dated as of Aug. 24, 2017 and paid all amounts due under that agreement.

Wells Fargo term loan

On Wednesday, the company also entered into a term loan credit agreement with Wells Fargo Bank, NA as administrative agent that provides for a $1 billion senior unsecured term loan facility, according to the 8-K.

The term loan will mature on Jan. 29, 2021.

The loans were funded in full at close.

Borrowings bear interest at Libor plus 75 bps.

This term loan agreement includes the same financial covenant that the new credit agreement with Sumitomo Mitsui contains.

Walgreens is a Deerfield, Ill.-based drugstore chain.

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