Baxter gets $1.5 billion five-year revolver, €200 million revolver

By Marisa Wong

Madison, Wis., July 7 – Baxter International Inc. entered into a $1.5 billion five-year revolving credit agreement on July 1, according to an 8-K filing with the Securities and Exchange Commission.

J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc. and Citigroup Global Markets Inc. are co-lead arrangers and joint bookrunners with JPMorgan Chase Bank, NA as administrative agent and Bank of America, NA and Citibank, NA as syndication agents.

Baxter may seek to increase the aggregate commitment under the credit agreement by up to $750 million, which would result in a maximum aggregate commitment of up to $2.25 billion.

The credit agreement also provides for the issuance of letters of credit.

Pricing is based on the company’s credit ratings. The interest rate ranges from Libor plus 80 basis points to Libor plus 150 bps. The facility fee ranges from 7.5 bps to 25 bps.

The credit agreement contains financial and other covenants, including a net leverage ratio covenant and an interest coverage ratio covenant.

The credit agreement replaces Baxter’s $1.5 billion four-year revolving credit agreement dated as of June 17, 2011, which was terminated on July 1.

Also on July 1, Baxter Healthcare SA and Baxter World Trade SPRL entered into a €200 million five-year revolving credit agreement.

J.P. Morgan Securities LLC, Citigroup Global Markets Ltd. and Deutsche Bank Securities Inc. are lead arrangers and joint bookrunners with J.P. Morgan Europe Ltd. as administrative agent and Citibank NA, London Branch and Deutsche Bank Securities Inc. as syndication agents.

The facility may be increased by up to €100 million, resulting in a maximum aggregate commitment of up to €300 million.

The euro credit agreement allows borrowers to draw funds in euros, Swiss francs or other currencies.

Interest is equal to Libor plus 80 bps to 150 bps, depending on credit ratings. The facility fee ranges from 7.5 bps to 25 bps, also based on ratings.

Like the dollar credit agreement, the euro credit agreement contains financial and other covenants, including a net leverage ratio covenant and an interest coverage ratio covenant.

The credit agreement replaces Baxter Healthcare SA’s €300 million revolving credit agreement dated Jan. 7, 2008, which was terminated on July 1.

Baxter International is a medical products and health-care company based in Deerfield, Ill.

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