Item 1.01. Entry into a Material Definitive Agreement.
On May 19, 2020, AmerisourceBergen Corporation (the "Company") completed the
sale of $500,000,000 aggregate principal amount of the Company's 2.800% Senior
Notes due May 15, 2030 (the "Notes"). The Notes were issued under and are
governed by an Indenture, dated as of November 19, 2009 (the "Base Indenture"),
between the Company and U.S. Bank National Association, as trustee (the
"Trustee"), as supplemented and amended by a Ninth Supplemental Indenture, dated
as of May 19, 2020, by and among the Company and the Trustee (the "Ninth
Supplemental Indenture" and together with the Base Indenture, the "Indenture").
The Notes bear interest at a rate of 2.800% per year, payable semiannually in
arrears on May 15 and November 15 of each year, beginning on November 15, 2020.
The Notes will mature on May 15, 2030, unless earlier redeemed or repurchased.
The Company may redeem the Notes, in whole or in part, at any time from time to
time prior to February 15, 2030 at a "make-whole" redemption price set forth in
the Ninth Supplemental Indenture (which redemption price may not be less than
the principal amount of the Notes to be redeemed) and at any time on or after
February 15, 2030 at 100% of the principal amount, in each case, plus accrued
and unpaid interest, if any, to the date of redemption. Subject to certain
limitations, in the event of a change of control of the Company, the Company
will be required to make an offer to purchase the Notes at a price equal to 101%
of the principal amount of the Notes to be purchased, plus accrued and unpaid
interest, if any, to the date of repurchase.
The Notes are unsecured and unsubordinated obligations of the Company. The Notes
rank equal in right of payment with all of the Company's existing and future
unsecured and unsubordinated indebtedness. However, the Notes are structurally
subordinated to all indebtedness and other liabilities, including trade
payables, of the Company's subsidiaries.
Subject to a number of important qualifications and exceptions, the Indenture,
among other things, limits the Company's ability and the ability of the
Company's restricted subsidiaries to create liens and to enter into sale and
leaseback transactions and limits the Company's ability to merge or consolidate
with or into other entities or to sell, lease or convey all or substantially all
of the Company's and its restricted subsidiaries' assets, taken as a whole.
The Indenture provides for certain events of default which include (subject in
certain cases to grace and cure periods), among others, nonpayment of principal
or interest; breach of covenants or warranties in the Indenture; defaults under
or failure to pay certain other indebtedness; failure to pay certain final
judgments; and certain events of bankruptcy, insolvency, reorganization,
administration or similar proceedings. Generally, if an event of default occurs,
the Trustee and the holders of at least 25% in aggregate principal amount of the
then outstanding Notes may declare all the Notes to be due and payable
The foregoing is a brief description of certain terms of the Indenture and, by
its nature, is incomplete. It is qualified in its entirety by the text of the
Indenture. The Company is filing the Ninth Supplemental Indenture as Exhibit 4.1
to this Current Report on Form 8-K and the Base Indenture was filed with the
Securities and Exchange Commission on November 23, 2009 as Exhibit 4.1 to the
Company's Current Report on Form 8-K, all of which are incorporated herein by
Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 above with respect to the Indenture and
the Notes is hereby incorporated by reference into this Item 2.03 insofar as it
relates to the creation of a direct financial obligation.
Item 7.01. Regulation FD Disclosure.
On May 19, 2020, the Company issued a news release announcing that it closed the
offering of the Notes. The news release is being furnished with this Current
Report as Exhibit 99.1 and is incorporated herein by reference.
Item 8.01. Other Events.
The legal opinion of Morgan, Lewis & Bockius LLP as to the validity of the Notes
is attached as Exhibit 5.1 to this Current Report on Form 8-K and such opinion
contains the consent of Morgan, Lewis & Bockius LLP to the filing of its opinion
as an exhibit to this Current Report on Form 8-K.
Cautionary Note Regarding Forward-Looking Statements
Certain of the statements contained in this Current Report on Form 8-K are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words such
as "expect," "likely," "outlook," "forecast," "would," "could," "should," "can,"
"project," "intend," "plan," "continue," "sustain," "synergy," "on track,"
"believe," "seek," "estimate," "anticipate," "may," "possible," "assume,"
variations of such words, and similar expressions are intended to identify such
forward-looking statements. These statements are based on management's current
expectations and are subject to uncertainty and changes in circumstances and
speak only as of the date hereof. These statements are not guarantees of future
performance and are based on assumptions and estimates that could prove
incorrect or could cause actual results to vary materially from those indicated.
Among the factors that could cause actual results to differ materially from
those projected, anticipated, or implied are the following: unfavorable trends
in brand and generic pharmaceutical pricing, including in rate or frequency of
price inflation or deflation; competition and industry consolidation of both
customers and suppliers resulting in increasing pressure to reduce prices for
our products and services; changes in the United States healthcare and
regulatory environment, including changes that could impact prescription drug
reimbursement under Medicare and Medicaid; increasing governmental regulations
regarding the pharmaceutical supply channel and pharmaceutical compounding;
declining reimbursement rates for pharmaceuticals; continued federal and state
government enforcement initiatives to detect and prevent suspicious orders of
controlled substances and the diversion of controlled substances; continued
prosecution or suit by federal, state and other governmental entities of alleged
violations of laws and regulations regarding controlled substances, including
due to failure to achieve a global resolution of the multi-district opioid
litigation and other related state court litigation, and any related disputes,
including shareholder derivative lawsuits; increased federal scrutiny and
litigation, including qui tam litigation, for alleged violations of laws and
regulations governing the marketing, sale, purchase and/or dispensing of
pharmaceutical products or services, and associated reserves and costs; failure
to comply with the Corporate Integrity Agreement; material adverse resolution of
pending legal proceedings; the retention of key customer or supplier
relationships under less favorable economics or the adverse resolution of any
contract or other dispute with customers or suppliers; changes to customer or
supplier payment terms, including as a result of the COVID-19 impact on such
payment terms; risks associated with the strategic, long-term relationship
between Walgreens Boots Alliance, Inc. and the Company, including principally
with respect to the pharmaceutical distribution agreement and/or the global
generic purchasing services arrangement; changes in tax laws or legislative
initiatives that could adversely affect the Company's tax positions and/or the
Company's tax liabilities or adverse resolution of challenges to the Company's
tax positions; regulatory or enforcement action in connection with our former
compounded sterile preparations (CSP) business or the related consent decree;
managing foreign expansion, including non-compliance with the U.S. Foreign
Corrupt Practices Act, anti-bribery laws, economic sanctions and import laws and
regulations; financial market volatility and disruption; the loss, bankruptcy or
insolvency of a major supplier, including as a result of COVID-19; substantial
defaults in payment, material reduction in purchases by or the loss, bankruptcy
or insolvency of a major customer, including as a result of COVID-19; financial
and other impacts of COVID-19 on our operations or business continuity; changes
to the customer or supplier mix; malfunction, failure or breach of sophisticated
information systems to operate as designed; risks generally associated with data
privacy regulation and the international transfer of personal data; natural
disasters or other unexpected events that affect the Company's operations; the
impairment of goodwill or other intangible assets (including any additional
impairments with respect to foreign operations), resulting in a charge to
earnings; the acquisition of businesses that do not perform as expected, or that
are difficult to integrate or control, or the inability to capture all of the
anticipated synergies related thereto or to capture the anticipated synergies
within the expected time period; the Company's ability to manage and complete
divestitures; the disruption of the Company's cash flow and ability to return
value to its stockholders in accordance with its past practices; interest rate
and foreign currency exchange rate fluctuations; declining economic conditions
in the United States and abroad; and other economic, business, competitive,
legal, tax, regulatory and/or operational factors affecting the Company's
business generally. Certain additional factors that management believes could
cause actual outcomes and results to differ materially from those described in
forward-looking statements are set forth (i) in Item 1A (Risk Factors), in the
Company's Annual Report on Form 10-K for the fiscal year ended September 30,
2019 and elsewhere in that report, (ii) in Item 1A (Risk Factors), in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 and
elsewhere in that report and (iii) in other reports filed by the Company
pursuant to the Securities Exchange Act. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, except as required by
the federal securities laws.
Item 9.01. Financial Statements and Exhibits.
4.1 Ninth Supplemental Indenture, dated May 19, 2020, by and between
AmerisourceBergen Corporation and U.S. Bank National Association
(including Form of 2.800% Senior Note due 2030).
5.1 Opinion of Morgan, Lewis & Bockius LLP.
23.1 Consent of Morgan, Lewis & Bockius LLP (contained in Exhibit 5.1).
99.1 News release of AmerisourceBergen Corporation, dated May 19, 2020.
104 Cover Page Interactive Data File (formatted as inline XBRL)
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