Merus Labs makes $8 million payment on facility, lowers interest

By Tali Rackner

Norfolk, Va., Oct. 3 – Merus Labs International Inc. made the second of its regularly scheduled quarterly principal repayments under its new credit facility and reduced the annual interest rate under the credit facility by 0.5%, according to a press release.

On Sept. 30, the company made a second payment on its term debt of about $8 million.

Merus is required to make quarterly principal payments under this euro-denominated facility, which will result in continual deleveraging and reduced interest expense.

Additionally, the facility provides for decreased interest rates as the company’s leverage decreases, further reducing interest expense.

As a result of making the current debt repayment, Merus’ financial metrics triggered the lowering of its annual interest rate to 4% from 4.5% effective Oct. 1. This lowering of the interest rate represents annualized savings on interest expenses of roughly $700,000 for fiscal 2017, the release said.

The company's term debt facility balance currently stands at €100.5 million reflecting the most recent repayment. The majority of Merus' revenue, expenses and debt are euro-denominated limiting the company's exposure to currency fluctuations.

The specialty pharmaceutical company is based in Toronto.

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