Item 1.01 |
Entry into a Material Definitive Agreement. |
As previously disclosed, on March 8, 2018, Perrigo Company plc, a public limited company organized under the laws of Ireland (the “Company”), and Perrigo Finance Unlimited Company, a public unlimited company organized under the laws of Ireland and a wholly-owned finance subsidiary of the Company (“Perrigo Finance”), entered into a Revolving Credit Agreement by and among the Company, Perrigo Finance, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (the “Existing Revolving Credit Agreement”).
On August 15, 2019, the Company and Perrigo Finance entered into a Term Loan Credit Agreement by and among the Company, Perrigo Finance, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (the “Existing Term Loan Credit Agreement” and, together with the Existing Revolving Credit Agreement, the “Existing Credit Agreements”).
On April 20, 2022 (the “Effective Date”), the Company terminated the Existing Credit Agreements and, pursuant to a new Credit Agreement (the “New Credit Agreement”), entered into new senior secured credit facilities that consists of (i) a $1.0 billion five-year revolving credit facility (the “New Revolving Facility”), (ii) a $500 million five-year term loan A facility (the “New Term Loan A Facility”) and (iii) a $1.1 billion seven-year term loan B facility (the “New Term Loan B Facility” and, together with the New Term Loan A Facility, the “New Term Loan Facilities,” and the New Term Loan Facilities together with the New Revolving Facility, the “New Senior Secured Credit Facilities”). The New Senior Secured Credit Facilities are being incurred by the Company’s indirect wholly-owned subsidiary, Perrigo Investments, LLC (“Perrigo Investments”) and will be guaranteed, along with any hedging or cash management obligations entered into with a lender, by the Company and certain other wholly-owned subsidiaries of the Company. Perrigo Investments and the subsidiaries of the Company that guarantee the New Senior Secured Credit Facilities (the “Loan Parties”) will also provide guarantees of the Company’s and Perrigo Finance’s other existing notes.
The Loan Parties’ obligations under the New Credit Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all tangible and intangible assets of the Loan Parties, except for certain excluded assets, and (ii) so long as certain notes of the Company have been paid off in full and other conditions have been satisfied, all of the equity interests of the subsidiaries of the Loan Parties held by the Loan Parties (limited, in the case of the voting equity interests of certain foreign subsidiaries and certain domestic subsidiaries that hold no assets other than equity interests of foreign subsidiaries, to 65% of the voting equity interests of such subsidiaries).
The New Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants applicable to the Company and its consolidated subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. The New Credit Agreement contains financial covenants that require the Company and its restricted subsidiaries not to (i) exceed a maximum secured net leverage ratio or (ii) fall below a cash interest coverage ratio.
The New Credit Agreement contains events of default that are customary for a facility of this nature, including (subject in certain cases to grace periods and thresholds) non-payment of principal, non-payment of interest, fees or other amounts, material inaccuracy of representations and warranties, violation of covenants, payment cross-default to other material indebtedness, bankruptcy or insolvency events, failure by the collateral documents to create a valid and perfected security interest in any material portion of the collateral purported to be covered thereby, material judgment defaults and change of control as specified in the New Credit Agreement. If an event of default occurs, the maturity of amounts owed may be accelerated.