Item 1.01 Entry into a Material Definitive Agreement.
On September 27, 2021, Hologic, Inc., a Delaware corporation (“Hologic” or the “Company”), together with certain of its subsidiaries, refinanced its term loan and revolving credit facility by entering into Refinancing Amendment No. 2 (the “Refinancing Amendment”) to its Amended and Restated Credit and Guaranty Agreement, dated as of October 3, 2017, as amended (the “Original Credit Agreement”), with Bank of America, N.A., in its capacity as Administrative Agent, and certain other lenders from time to time party thereto. The Original Credit Agreement, as amended by the Refinancing Amendment, is referred to herein as the “Amended Credit Agreement.” The Amended Credit Agreement (i) includes a $1.5 billion senior term loan and a $2.0 billion revolving credit facility, (ii) extends the maturity of these facilities to September 25, 2026, (iii) reduces the interest rate margins under both facilities and the commitment fee under the revolver, (iv) includes certain amendments in connection with the prospective discontinuation of LIBOR and (v) provides additional flexibility under certain covenants.
Hologic, Hologic GGO 4 Ltd, a company incorporated in England and Wales (“Hologic U.K.”), and Hologic UK Finance LTD, a company incorporated in England and Wales, remain as the borrowers (the “Borrowers”) under the Amended Credit Agreement, and the Borrowers’ obligations under the Amended Credit Agreement remain guaranteed by certain domestic subsidiaries of the Company (the “Subsidiary Guarantors”). The Hologic subsidiaries that are or become Borrowers under the Amended Credit Agreement are referred to as “Designated Borrowers.”
The obligations of the Borrowers are secured by first-priority liens on, and a first-priority security interest in (in each case subject to certain liens permitted under the Amended Credit Agreement), substantially all of the U.S. assets of Hologic and the Subsidiary Guarantors, including, with certain exceptions, all of the capital stock of substantially all of the domestic subsidiaries owned by the Company and the Subsidiary Guarantors and 65% of the capital stock of certain of the Company’s first-tier foreign subsidiaries. The security interests are evidenced by a pledge and security agreement with Bank of America, N.A., in its capacity as Collateral Agent, and other related agreements. These liens are subject to release during the term of the facilities if the Company is able to achieve certain corporate or corporate family ratings and other conditions are met.
Under the Refinancing Amendment, each lender converted their commitments under the Original Credit Agreement into new credit facilities (the “Refinanced Credit Facilities”) as follows:
| | • | | A $1.5 billion secured term loan (the “Term Loan”) to Hologic maturing on September 25, 2026 (the “Stated Maturity Date”); and |
| | • | | A secured revolving credit facility (the “Revolver”) under which the Borrowers may borrow up to $2.0 billion, subject to certain sublimits, with a final maturity date of the Stated Maturity Date. |
The Revolver has the following sublimits:
| | • | | A sublimit equal to the lesser of (x) $250 million and (y) the aggregate revolving commitments which may be drawn by Hologic U.K.; |
| | • | | A sublimit equal to the lesser of (x) $250 million and (y) the aggregate revolving commitments which may be drawn by certain subsidiaries of Hologic to the extent designated as a borrower under the Amended Credit Agreement (“Designated Borrower Sublimit”); |
| | • | | A letter of credit sublimit equal to the lesser of (x) $200 million and (y) the aggregate revolving commitments (“LC Sublimit”); and |
| | • | | A swing line sublimit equal to the lesser of (x) $100 million and (y) the aggregate USD revolving commitments. |
Substantially all of the net proceeds of the Term Loan, were used to repay the amounts outstanding under the term loan under the Original Credit Agreement (the “Refinancing”). There were no amounts outstanding under the revolver under the Original Credit Agreement.
Borrowings made under the Revolver may be made in certain alternative currencies pursuant to the terms of the Amended Credit Agreement. The Company has the ability, subject to the terms of the Amended Credit Agreement, to designate any additional wholly-owned foreign subsidiary of Hologic as a Designated Borrower to receive loans under the Designated Borrower Sublimit. The obligations of any Designated Borrower under the Designated Borrower Sublimit are guaranteed by Hologic and the Subsidiary Guarantors.
Borrowings made under the Refinanced Credit Facilities, other than Swing Line Loans (as defined in the Amended Credit Agreement), bear interest, at the Company’s option, at the Base Rate (as defined in the Amended Credit Agreement), at the Eurocurrency Rate (as defined in the Amended Credit Agreement), at the Alternative Currency Daily Rate (as defined in the Amended Credit Agreement), at the Alternative Currency Term Rate (as defined in the Amended Credit Agreement), or at the LIBOR Daily Floating Rate (as defined in the Amended Credit Agreement), in each case plus the Applicable Rate (as defined in the Amended Credit Agreement).
