Item 1.01. Entry into a Material Definitive Agreement
Revolving Credit Agreement
On April 8, 2019, Teva Pharmaceutical Industries Ltd. (“Teva”) and certain of its subsidiaries entered into a $2.3 billion senior unsecured revolving credit agreement (the “Revolving Credit Agreement ”) with a syndicate of banks, arranged by Bank of America Merrill Lynch International Designated Activity Company and HSBC Bank plc, as Coordinating Bookrunners and Mandated Lead Arrangers, Barclays Bank PLC, BNP Paribas Dublin Branch, Citibank, N.A., London Branch, Credit Suisse Loan Funding LLC, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Mizuho Bank, Ltd., Morgan Stanley Senior Funding, Inc., MUFG Bank, Ltd., Sumitomo Mitsui Banking Corporation and PNC Bank National Association, as Bookrunners & Mandated Lead Arrangers, Banca IMI, as Lead Arranger, and Bank of America, N.A., as Administrative Agent.
The Revolving Credit Agreement provides for two separate tranches of commitments, a $1.15 billion Tranche A and a $1.15 billion Tranche B, and loans and letters of credit will be available from time to time under each tranche for Teva’s general corporate purposes. Tranche A has a maturity date of April 8, 2022, with two one year extension options, and will bear interest at LIBOR plus a margin ranging from 0.900% to 1.900% based on Teva’s credit rating from time to time. Tranche B has a maturity date of April 8, 2024, and will bear interest at LIBOR plus a margin ranging from 1.100% to 2.100% based on Teva’s credit rating from time to time. The commitments under each Tranche will also be subject to a commitment fee on undrawn amounts ranging from (i) in the case of Tranche A commitments, 0.225% to 0.570% and (ii) in the case of Tranche B commitments, 0.275% to 0.630%, in each case, based on Teva’s credit rating from time to time. Funding of the loans under the Revolving Credit Agreement is subject to customary drawdown conditions.
The Revolving Credit Agreement contains certain customary affirmative and negative covenants for facilities of this type, including certain reporting obligations and certain limitations on dispositions; mergers or consolidations; restricted payments; and limitations on liens, encumbrances and certain indebtedness. The Revolving Credit Agreement contains two financial maintenance covenants, (i) a maximum leverage ratio stepping down from 6.25x to 3.50x over the life of the facility and (ii) a static minimum interest coverage ratio of 3.50x. The Revolving Credit Agreement also contains customary events of default, includingnon-compliance with one or more of the covenants.
In connection with entry into the Revolving Credit Agreement, Teva’s existing $3.0 billion senior unsecured revolving credit agreement will be terminated.
The foregoing description of the Revolving Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Revolving Credit Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this Current Report onForm 8-K is incorporated by reference herein.
