Royalty Pharma expands borrowing capacity of revolver to $1.8 billion

By Marisa Wong

Los Angeles, Dec. 28 – Royalty Pharma plc and non-wholly owned consolidated subsidiary Royalty Pharma Holdings Ltd. entered into a third amendment on Dec. 22 to their amended and restated revolving credit agreement dated Sept. 15, 2021 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The amendment increases the borrowing capacity to $1.8 billion from $1.5 billion, extends the maturity of $1.69 billion of the revolving commitments to Dec. 22, 2028 from Oct. 31, 2027 and makes some other technical changes.

The remaining $110 million of revolving commitments under the credit agreement still matures on Oct. 31, 2027.

The credit agreement provides for an unsecured revolver that is subject to an interest rate of daily SOFR plus an applicable margin of 100 basis points to 162.5 bps, depending on debt ratings.

The credit agreement requires the company to maintain a consolidated leverage ratio of funded debt to adjusted EBITDA at or below 4.00 to 1.00, or at or below 4.50 to 1.00 following a qualifying material acquisition, and a consolidated coverage ratio of adjusted EBITDA to consolidated interest expense at or above 2.50 to 1.00.

Royalty Pharma is a New York-based buyer of biopharmaceutical royalties.

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