McKesson inks $4 billion replacement revolver, $500 million term loan

Chicago, Nov. 7 – McKesson Corp. announced that it entered into two new loan agreements on Monday, a $4 billion replacement revolver and a $500 million delayed-draw term loan, according to an 8-K filing with the Securities and Exchange Commission.

Both facilities can be used for general corporate purposes.

Revolver

The revolver has Bank of America, NA as administrative agent.

The new facility, due November 2027, has a $4 billion revolving line of credit with a $3.6 billion sublimit available in certain other major currencies.

Interest will be at SOFR plus 68.5 basis points to 110 bps, based on ratings. The facility fee is between 6.5 bps and 15 bps, in five rating-based tiers.

Covenants require the company maintain a total debt to consolidated EBITDA ratio not greater than 4x, with a 4.5x step-up permitted following acquisitions.

There is the possibility of establishing key performance indicators that would allow adjustments to the fees and margins.

The facility replaces the company’s $4 billion five-year revolving facility from 2019.

BofA Securities, Inc., Barclays, Citibank, NA, Goldman Sachs Bank USA, JPMorgan Chase Bank, NA and Wells Fargo Securities, LLC were the joint lead arrangers and joint bookrunners.

Barclays, Citibank, NA and Goldman Sachs Bank USA were the co-documentation agents.

JPMorgan Chase Bank, NA and Wells Fargo Bank, NA were the co-syndication agents.

Term loan

The new $500 million delayed-draw term loan is available for 90 days after the closing date in up to three separate borrowings.

The maturity date is November 2025.

Interest will be based on SOFR plus 75 bps to 125 bps. There is also a ticking fee between 7 bps and 15 bps.

The actual margin is based on ratings.

Like the revolver, covenants require the company maintain a total debt to consolidated EBITDA ratio not greater than 4x, with a 4.5x step-up permitted for acquisitions.

Toronto Dominion (Texas) LLC is the administrative agent.

PNC Capital Markets LLC, TD Securities (USA) LLC, Bank of Nova Scotia and Truist Securities, Inc. are the joint lead arrangers and joint bookrunners.

McKesson is an Irving, Tex.-based health care services and information technology company.

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