Vertex Pharmaceuticals enters $500 million five-year senior revolver

By Marisa Wong

Los Angles, July 5 – Vertex Pharmaceuticals Inc. entered into a credit agreement on July 1 with Bank of America, NA as administrative agent for a $500 million senior unsecured revolving facility, according to an 8-K filing with the Securities and Exchange Commission.

Wholly owned subsidiaries Vertex Pharmaceuticals (Europe) Ltd. and Vertex Pharmaceuticals (Ireland) Ltd. are co-borrowers.

The company may request that the borrowing capacity be increased by an additional $500 million.

Up to $100 million of the revolver may be allocated for loans and letters of credit in certain non-U.S. dollar currencies.

The outstanding loans mature, and the unused commitments terminate, on July 1, 2027.

Dollar-denominated loans will bear interest at SOFR plus an applicable margin ranging from 100 basis points to 150 bps, depending on the company’s consolidated leverage ratio or, to the extent available, the company’s credit rating. Alternative currency-denominated loans will bear interest at the applicable benchmark rate for that alternative currency plus the applicable margin.

Loans may be prepaid at par, and commitments may be reduced at any time, in whole or in part, without premium or penalty.

The credit agreement includes a financial covenant to maintain a consolidated leverage ratio of 3.5 to 1.0, subject to an increase to 4.0 to 1.0 following a material acquisition.

Proceeds will be used for general corporate purposes.

On the closing date, the company terminated and repaid all outstanding obligations under its existing credit agreement dated Sept. 17, 2019 with Bank of America as administrative agent.

Vertex is a biopharmaceutical company based in Boston.

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