Item 1.01 Entry into a Material Definitive Agreement
On June 19, 2020, our wholly-owned subsidiary Lantheus Medical Imaging, Inc.
("LMI") amended (the "Amendment") its Credit Agreement, dated as of June 27,
2019 (the "Credit Agreement", and the Credit Agreement as amended by the
Amendment, the "Amended Credit Agreement"), by and among Wells Fargo Bank, N.A.,
as administrative agent (in that capacity, the "Administrative Agent") and
collateral agent, each of the lenders from time to time party thereto (the
"Lenders"), LMI and Lantheus Holdings, Inc. (the "Company").
We are entering into the Amendment as a result of the impact of the COVID-19
pandemic on the business and operations of the Company and Progenics
Pharmaceuticals, Inc. ("Progenics") previously disclosed by the Company and
Progenics and the near-term higher level of indebtedness resulting from the
Company's decision not to immediately repay the Progenics debt secured by the
Relistor royalties following the Company's acquisition of Progenics.
The Amendment provides for, among other things, modifications to LMI's financial
maintenance covenants. The covenant related to Total Net Leverage Ratio (as
defined in the Amended Credit Agreement) has been waived from the date of the
Amendment through December 31, 2020. For the fiscal quarter ending March 31,
2021, LMI must be in compliance with a Total Net Leverage Ratio of 5.50 to 1.00.
For the fiscal quarter ending June 30, 2021, LMI must be in compliance with a
Total Net Leverage Ratio of 3.75 to 1.00. From and after the fiscal quarter
ending September 30, 2021, LMI must be in compliance with a Total Net Leverage
Ratio of 3.50 to 1.00.
The Interest Coverage Ratio (as defined in the Amended Credit Agreement)
covenant for the fiscal quarter ending June 30, 2020 through the fiscal quarter
ending March 31, 2021, must be at least 2.00 to 1.00. From and after the fiscal
quarter ending June 30, 2021, it must be at least 3.00 to 1.00.
The Amendment also introduces a new financial covenant requiring Consolidated
Liquidity (as defined in the Amended Credit Agreement) to be no less than
$150,000,000. The Consolidated Liquidity covenant is tested on a continuing
basis beginning on the date of the Amendment and ending on the date on which LMI
delivers a compliance certificate for the fiscal quarter ending March 31, 2021.
For the period beginning on the date of the Amendment and ending on the
Adjustment Date (as defined in the Amended Credit Agreement) for the fiscal
quarter ending March 31, 2021, loans under the Amended Credit Agreement bear
interest at LIBOR plus 3.25% or the Base Rate plus 2.25%. On and after the
Adjustment Date for the fiscal quarter ending on March 31, 2021, loans bear
interest at LIBOR plus a spread that ranges from 1.50% to 3.00% or the Base Rate
plus a spread that ranges from 0.50% to 2.00%, in each case based on LMI's Total
Net Leverage Ratio.
The commitment fee applicable to the Revolving Facility is set at 0.50% until
the Adjustment Date for the fiscal quarter ending March 31, 2021. On and after
the Adjustment Date for the fiscal quarter ending on March 31, 2021, the
commitment fee ranges from 0.15% to 0.40% based on LMI's Total Net Leverage
Ratio.
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