West Pharmaceutical gets $300 million five-year replacement revolver

By Marisa Wong

Morgantown, W.Va., April 1 – West Pharmaceutical Services, Inc. established a new $300 million senior unsecured revolving credit facility on March 28, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America Merrill Lynch, Wells Fargo Securities, LLC, MUFG Bank, Ltd. and JPMorgan Chase Bank, NA are joint lead arrangers and joint bookrunners with Bank of America, NA as administrative agent, swingline lender and an issuing lender; and Wells Fargo Bank, NA, MUFG Bank and JPMorgan Chase Bank as co-syndication agents.

The credit agreement replaces the company’s existing $300 million credit facility dated Oct. 15, 2015, which was terminated on March 28. The company had €21,016,333.33 and ¥500,388,892 outstanding under the old credit agreement, which it repaid in full using, in part, funds drawn under the new credit facility in the amounts of €21 million and ¥500 million.

The new revolver has an up to $30 million sublimit for swingline loans for domestic borrowers in dollars and a $20 million swingline loan for West’s German holding company and an up to $30 million sublimit for the issuance of standby letters of credit.

The credit facility may be increased from time to time by the greater of $350 million and EBITDA for the preceding 12-month period in the aggregate.

The credit agreement has a termination date of March 28, 2024.

Borrowings bear interest at Libor plus a margin based on the ratio of the company’s net consolidated debt to its modified EBITDA, ranging from 87.5 basis points to 137.5 bps.

The credit agreement includes financial covenants requiring the company to not permit the ratio net consolidated debt to modified EBITDA to be greater than 3.5 to 1; provided that, no more than three times during the term of the credit facility, the ratio can be increased to 4.0 to 1 upon the occurrence of a qualified acquisition for each of the four fiscal quarters immediately following that acquisition.

West Pharmaceutical is an Exton, Pa.-based manufacturer of pharmaceutical packaging and delivery systems.

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