Eagle Pharmaceuticals signs $150 million three-year credit facility

By Mary-Katherine Stinson

Lexington, Ky., Nov. 3 – Eagle Pharmaceuticals, Inc. on Nov. 1 entered a third amended and restated credit agreement with JPMorgan Chase Bank, NA as administrative agent which amends and restates in its entirety the company’s existing credit agreement dated Nov. 8, 2019, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement provides a $100 million three-year revolving credit facility which includes a $5 million letter-of-credit sub facility and a $50 million three-year term loan.

The facilities mature Oct. 31, 2025.

Loans under the credit facility bear interest at SOFR plus a credit adjustment spread plus a margin ranging from 250 basis points to 325 bps based on the company’s total net leverage ratio.

There is a commitment fee on the unused portion of the revolver that ranges from 37.5 bps to 47.5 bps also based on the company’s total net leverage ratio.

The term loan amortizes in quarterly installments in an amount equal to $1.25 million per fiscal quarter for each quarter ended after closing through the fiscal quarter ended Sept. 30, 2023, and in an amount equal to $2.5 million per fiscal quarter for each fiscal quarter after.

The company may terminate, reduce or prepay the loans under the revolver at any time subject to break funding payments. Mandatory prepayments of the revolver would be required if at any time the total amount of all outstanding loans and letters of credit issued under the revolver exceeds total commitment of all lenders.

Mandatory prepayments of the term loan are required with the net proceeds of certain asset sales, transfers or other dispositions, proceeds received for casualty and other condemnation losses and any indebtedness incurred that is not permitted.

Under the terms of the agreement, the company is also required to comply with a maximum total net leverage ratio, a fixed charge coverage ratio and a minimum liquidity covenant.

JPMorgan Chase Bank, NA is the sole bookrunner and lead arranger.

Citizens Bank, NA is the documentation agent.

The company’s wholly owned subsidiaries, Eagle Biologics, Inc. and Eagle Research Labs Ltd., are the guarantors.

On the amendment date, the company borrowed $15 million under the revolving credit facility and $50 million under the term loan facility.

Approximately $35.4 million of the proceeds of the credit facility were used on the amendment date to refinance all amounts outstanding under the existing facility. Remaining proceeds are intended to repay debt of the company’s wholly-owned subsidiary, Acacia Pharma Group Ltd., and for other corporate purposes.

Woodcliff Lake, N.J.-based Eagle Pharmaceuticals is a specialty pharmaceutical company focused on developing and commercializing injectable products.

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