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Spectrum Pharmaceuticals closes on $75 million revolving facility
By Marisa Wong
Madison, Wis., Sept. 11 - Spectrum Pharmaceuticals, Inc. entered into a credit agreement on Sept. 5 with Bank of America, NA as the administrative agent and an initial lender and Wells Fargo Bank, NA as an initial lender. Bank of America Merrill Lynch is the lead arranger and bookrunner for the facility.
According to an 8-K filing with the Securities and Exchange Commission, the credit agreement provides the company with a $75 million revolving line of credit, which may be increased to $125 million, subject to certain conditions.
The facility expires on Sept. 5, 2014.
Interest is equal to Libor plus 175 basis points to 225 bps, depending on the company's consolidated leverage ratio. The commitment fee ranges from 37.5 bps to 62.5 bps.
The credit agreement includes the following financial covenants:
• The company cannot allow the consolidated interest coverage ratio as of the end of any fiscal quarter to be less than 3.00 to 1.00;
• The consolidated leverage ratio may not be greater than 2.00 to 1.00 for the period from the closing date through Sept. 30 or greater than 1.50 to 1.00 for the quarter ending Dec. 31 and each quarter after that; and
• The ratio of (a) sum of (i) unencumbered cash and cash equivalents on a consolidated basis, plus (ii) net accounts receivable on a consolidated basis, to (b) consolidated funded indebtedness at the end of any quarter must not be less than 2.00 to 1.00.
On the closing date, the company drew $50 million on the revolving line of credit and used the loan proceeds to help fund its purchase of Allos Therapeutics, Inc.
The biotechnology company is based in Henderson, Nev.
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