| Item 1.01 |
Entry into a Material Definitive Agreement. |
Term Loan Credit Facility
On December 22, 2022 (the “Effective Date”), Amgen Inc. (“Amgen”), Citibank, N.A. (“Citibank”), as administrative agent, Bank of America, N.A. (“Bank of America”), as syndication agent, Citibank, Bank of America, Goldman Sachs Bank USA and Mizuho Bank, Ltd. as lead arrangers and book runners, and Goldman Sachs Bank USA and Mizuho Bank, Ltd. as documentation agents entered into a Term Loan Credit Agreement (the “Term Loan Credit Agreement”). The Term Loan Credit Agreement provides for a (1) a $2,000,000,000 18-month term loan tranche (the “18-Month Tranche”) and (2) a $2,000,000,000 3-year term loan tranche (the “3-Year Tranche”, and together with the 18-Month Tranche, the “Term Loan Credit Facility”), with the commitments under the Bridge Credit Agreement entered into by Amgen, as borrower, Citibank, as administrative agent, Bank of America, as syndication agent, and Citibank and Bank of America as lead arrangers and book runners, on December 12, 2022 (the “Bridge Credit Facility”) (as filed in our Current Report on Form 8-K on December 12, 2022) to be automatically reduced by a corresponding amount. The Term Loan Credit Facility is available to finance the payment of the transaction consideration in connection with the acquisition by Amgen of Horizon Therapeutics plc (“Horizon”) (the “Acquisition”), the repayment of certain existing indebtedness of Horizon, and the payment of fees and expenses related to the Acquisition. Advances under the Term Loan Credit Facility will be available after the Effective Date, subject to the satisfaction of certain conditions set forth in the Term Loan Credit Agreement and will mature on, for the 18-Month Tranche, the date that is 18 months after, and for the 3-Year Tranche, the date that is three years after, the date on which the advances are made under the Term Loan Credit Facility. The commitments under the Term Loan Credit Facility, unless previously terminated, terminate on the earlier of (i) the date on which the Acquisition has been completed and the other purposes of the Term Loan Credit Facility have been achieved without the making of any advances under the Term Loan Credit Facility and (ii) the time after certain mandatory cancellation events occur, including the abandonment of the Acquisition.
Advances under the Term Loan Credit Agreement will bear interest at an annual rate of, at Amgen’s option, either (i) term SOFR plus 0.10%, plus between 0.875% and 1.375%, depending on the rating of our senior long-term unsecured debt, or (ii) the highest of (A) Citibank’s base commercial lending rate, (B) the overnight federal funds rate plus 1⁄2 of 1.00% and (C) one-month adjusted term SOFR plus 1.00%, plus between 0.000% and 0.375%, depending on the rating of our senior long-term unsecured debt. We are also required to pay, commencing on March 12, 2023 and under both the 18-Month Tranche and the 3-Year Tranche, a ticking fee of 0.125% per annum that will accrue on the aggregate undrawn commitments under the applicable tranche.
The Term Loan Credit Agreement contains customary affirmative and negative covenants that will apply after the Effective Date, including limitations on mergers, consolidations and sales of assets, limitations on liens and sales and leasebacks, limitations on transactions with affiliates and limitations on subsidiary indebtedness. In addition, the Term Loan Credit Agreement requires maintenance of a minimum consolidated interest coverage ratio of EBITDA to total interest expense, each on a consolidated basis.
The foregoing description of the Term Loan Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Term Loan Credit Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated herein by reference into this Item 1.01.