Halozyme closes $600 million revolving, term loans for Antares merger

By Marisa Wong

Los Angeles, May 24 – Halozyme Therapeutics, Inc. entered into a credit agreement on May 24 for a $350 million revolving credit facility and a $250 million term loan facility, according to an 8-K filing with the Securities and Exchange Commission.

Wholly owned subsidiary Halozyme, Inc. and Antares Pharma, Inc. guarantee Halozyme Therapeutics’ obligations under the credit agreement.

The facilities will mature on Nov. 30, 2026.

The credit agreement contains an expansion feature, which allows the company to increase the total principal amount of the facilities, provided the company remains in compliance with underlying financial covenants on a pro forma basis, including the consolidated interest coverage ratio and the consolidated net leverage ratio covenants, and provided the consolidated net leverage ratio will be not greater than 0.25 to 1.00 less than the consolidated net leverage ratio then permitted under the credit agreement.

Borrowings bear interest at term SOFR with a SOFR adjustment of 10 basis points plus a margin based on the company’s consolidated total net leverage ratio, ranging from 125 bps to 225 bps.

In addition to paying interest, the company will pay a commitment fee on the unused commitments ranging from 15 bps to 35 bps, based on company’s consolidated total net leverage ratio.

The credit agreement includes financial covenants requiring the company to maintain, measured as of the end of each fiscal quarter, a maximum consolidated net leverage ratio of 4.75 to 1.00 initially, which declines to 4.00 to 1.00 over the term of the facility, and a minimum consolidated interest coverage ratio of 3.00 to 1.00.

If the company completes a material acquisition, the consolidated net leverage ratio covenant will be increased by 0.50 to 1.00 (to a level not to exceed 4.75 to 1.00) for a period of three fiscal quarters following such material acquisition.

The term loan requires quarterly scheduled repayments in each of the first, second, third and fourth years after closing in annual amounts equal to 2.5%, 5%, 7.5% and 10% of the initial principal amount of the term loans, respectively. The term loans are also subject to mandatory prepayments from the proceeds of certain asset sales.

Proceeds of the term loan and the initial borrowings under the revolver, in addition to a portion of the company’s existing cash on hand, were used to pay the consideration for Halozyme Therapeutics’ acquisition of Antares, which closed on Tuesday, to refinance Antares’ existing debt and to pay related fees and expenses.

After closing, revolver borrowings are to be used for working capital and other general corporate purposes, including potential acquisitions.

Bank of America, NA is administrative agent, swingline lender and letter-of-credit issuer.

BofA Securities, Inc., Wells Fargo Securities, LLC and JPMorgan Chase Bank, NA are joint lead arrangers and joint bookrunners.

Wells Fargo Securities and JPMorgan Chase Bank are co-syndication agents.

Bank of the West, Citibank, NA, Goldman Sachs Bank USA, Mizuho Bank, Ltd. and Silicon Valley Bank are co-documentation agents.

Halozyme is a San Diego-based biotechnology company.

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