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Walgreens obtains $5 billion delayed-draw loan with three parts
By Rebecca Melvin
Concord, N.H., Nov. 16 – Walgreens Boots Alliance, Inc. entered into a $5 billion delayed-draw term loan credit agreement of three parts including an up to $2 billion 364-day tranche, an up to $2 billion two-year tranche and an up to $1 billion three-year tranche, according to an 8-K filing with the Securities and Exchange Commission.
Borrowings under the 364-day tranche will bear interest at SOFR plus 70 basis points for six months beginning with the initial funding date or the Feb. 15, 2022 margin trigger date, and at SOFR plus 75 bps after the six-month anniversary.
The borrowing rate for the two-year tranche is SOFR plus 85 bps and the borrowing rate for the three-year tranche is SOFR plus 100 bps.
Bank of America, NA is administrative agent.
Voluntary prepayments of the loans and reductions of the unutilized portion of the commitments are permissible without penalty, subject to certain conditions pertaining to minimum notice and minimum reduction amounts as described in the credit agreement. Amounts borrowed under the facility and repaid or prepaid may not be reborrowed.
The credit agreement contains covenants that are customary for unsecured financings of this type. There is a financial covenant requiring that, as of the last day of each fiscal quarter, commencing with the first quarter ending after the effective date, the ratio of consolidated debt to total capitalization shall not be greater than 0.6:1.0.
Bank of America Europe DAC, Sumitomo Mitsui Banking Corp. and Wells Fargo Securities, LLC are the joint lead arrangers and bookrunners.
Walgreens is a Deerfield, Ill.-based drugstore chain.
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