Item 1.01 Entry Into a Material Definitive Agreement
On December 2, 2022, Lantheus Holdings, Inc.'s (the "Company") wholly-owned
subsidiary Lantheus Medical Imaging, Inc. ("LMI") refinanced its existing credit
facility, consisting of (i) a $200.0 million five-year term loan facility (the
"Old Term Facility") and (ii) a $200.0 million five-year revolving credit
facility (the "Old Revolving Facility" and, together with the Old Term Facility,
the "Old Facility"), with a new delayed draw term loan facility and a new
revolving credit facility (collectively, these transactions are referred to as
the "Refinancing").
In order to consummate the Refinancing, LMI entered into a Credit Agreement (the
"Credit Agreement") by and among Citizens 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") and the Company. The
Credit Agreement establishes (i) a new $100.0 million delayed draw term loan
facility (the "Delayed Draw Term Loan Facility" and, the loans thereunder, the
"Term Loans") and (ii) a new $350.0 million five-year revolving credit facility
(the "New Revolving Facility" and, together with the Delayed Draw Term Loan
Facility, the "New Facility").
LMI used approximately $167.6 million of cash on hand to repay in full the
aggregate remaining principal amount of the loans outstanding under the Old
Facility and to pay related interest, transaction fees and expenses.
Delayed Draw Term Loan Facility
LMI expects to draw from the Delayed Draw Term Loan Facility only if the
proposed Offering of Notes by the Company (as defined below) is not consummated.
The commitment of the Lenders to provide the Delayed Draw Term Loan Facility
will be terminated upon funding of any such notes. The Delayed Draw Term Loan
Facility includes a commitment fee equal to 0.20% per annum on the average daily
unused amount of the Delayed Draw Term Loan Facility, which is payable
commencing on January 16, 2023 and ending on the earliest of (i) the day the
Term Loans under the Delayed Draw Term Loan Facility are funded, (ii) the last
day of the Delayed Draw Availability Period (as defined in the Credit Agreement)
and (iii) the day the commitments under the Delayed Draw Term Loan Facility are
reduced to zero.
New Revolving Facility
Under the terms of the New Revolving Facility, the Lenders commit to extend
credit to LMI from time to time until December 2, 2027 (the "Revolving
Termination Date") consisting of revolving loans (the "Revolving Loans") in an
aggregate principal amount not to exceed $350.0 million (the "Revolving
Commitment") at any time outstanding, including a $20.0 million sub-facility for
the issuance of letters of credit (the "Letters of Credit") and a
$10.0 million sub-facility for swingline loans (the "Swingline Loans"). The
Letters of Credit, Swingline Loans and the Revolving Loans are expected to be
used for working capital and for other general corporate purposes. The New
Revolving Facility terminates on the Revolving Termination Date.
The Revolving Loans bear interest, with pricing based from time to time at LMI's
election, at (i) Term SOFR (as defined in the Credit Agreement) plus an
applicable margin that ranges from 1.50% to 2.50% based on LMI's Total Net
Leverage Ratio (as defined in the Credit Agreement) or (ii) the Alternative Base
Rate (as defined in the Credit Agreement) plus an applicable margin that ranges
from 0.50% to 1.50% based on LMI's Total Net Leverage Ratio. The New Revolving
Facility also includes an unused commitment fee at a rate ranging from 0.15% to
0.35% per annum based on LMI's Total Net Leverage Ratio.
LMI is permitted to voluntarily prepay the Revolving Loans, in whole or in part,
or reduce or terminate the Revolving Commitment, in each case, without premium
or penalty. On any business day on which the total amount of outstanding
Revolving Loans, Letters of Credit and Swingline Loans exceeds the total
Revolving Commitment, LMI must prepay the Revolving Loans in an amount equal to
such excess. LMI is not required to make mandatory prepayments under the New
Revolving Facility.
LMI has the right to request an increase to the Revolving Commitment in an
aggregate principal amount of up to the sum of $335.0 million or Consolidated
EBITDA (as defined in the Credit Agreement) for the four consecutive fiscal
quarters most recently ended, plus additional amounts in certain circumstances
(collectively, the "Incremental Cap"), minus Incremental Term Loans (as defined
below).
Incremental Term Loans
LMI has the right to request incremental term loans ("Incremental Term Loans")
in an aggregate principal amount of up to the Incremental Cap less any
incremental increases to the Revolving Commitment. Proceeds of Incremental Term
Loans may be used for working capital and for other general corporate purposes
and will bear interest at rates agreed between the Company and the lenders
providing the Incremental Term Loans.
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Other Terms
The New Facility contains a number of affirmative, negative and reporting
covenants, as well as financial maintenance covenants pursuant to which LMI is
required (a) to be in quarterly compliance, measured on a trailing four quarter
basis, with a Total Net Leverage Ratio (as defined in the Credit Agreement) of
4.00 to 1.00 through the quarter ending December 31, 2023 and 3.50 to 1.00
thereafter and (b) to maintain an Interest Coverage Ratio (as defined in the
Credit Agreement) of not less than 3.00:1.00 for each fiscal quarter. Upon an
event of default, the Administrative Agent will have the right to declare the
loans and other obligations outstanding under the New Facility immediately due
and payable and all commitments immediately terminated.
. . .
Item 1.02 Termination of a Material Definitive Agreement
In connection with the Refinancing, effective as of December 2, 2022, LMI has
satisfied and discharged all obligations under, and terminated, the Old
Facility, except for obligations that pursuant to the express terms of the Old
Facility survive payment of the obligations.
The Old Facility consisted of a $200.0 million five-year term loan agreement
that was scheduled to mature on June 27, 2024. As of December 2, 2022, after
giving effect to the New Facility, there were no amounts outstanding under the
Old Facility and LMI incurred no termination penalties in connection with the
early termination of the Old Facility.
Certain of the lenders under the Old Facility and certain of their affiliates
have performed investment banking, commercial lending and underwriting services
for the Company, LMI, their subsidiaries and respective affiliates, from time to
time, for which such lenders and their affiliates have received customary fees
and expenses. These parties may, from time to time, engage in transactions with,
and perform services for the Company, LMI, their subsidiaries or their
respective affiliates in the ordinary course of their business.
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 is incorporated by reference into this
Item 2.03.
Item 8.01. Other Events
On December 5, 2022, the Company issued a press release announcing that it
proposes to offer (the "Offering"), subject to market conditions and other
factors, $500.0 million in aggregate principal amount of convertible senior
notes due 2027 (the "Notes"). The Company expects to grant to the initial
purchasers of the Notes an option to purchase up to an additional $75.0 million
in aggregate principal amount of the Notes (the "Option Notes"). The Notes will
be offered to qualified institutional buyers pursuant to Rule 144A under the
Securities Act of 1933, as amended. A copy of the press release is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
The Company's board of directors has authorized the repurchase of up to
$150.0 million in aggregate amount of its common stock under certain
circumstances. The Company expects to use up to $75.0 million of the net
proceeds from the Offering to repurchase shares of the Company's common stock
from purchasers of the Notes in privately negotiated transactions effected with
or through one of the initial purchasers or its affiliate. In addition, the
Company's board of directors has authorized additional repurchases of common
stock in an amount up to $75.0 million out of the remaining proceeds from the
Offering, including any proceeds from the Option Notes, in privately negotiated
transactions, open market purchases or otherwise, in accordance with applicable
federal and state securities laws and regulations.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit
Number Exhibit Description
10.1 Credit Agreement, dated December 2, 2022, among Lantheus Medical
Imaging, Inc., Lantheus Holdings, Inc., the lenders and other parties
party thereto and Citizens Bank, N.A., as administrative and
collateral agent.
99.1 Press Release of Lantheus Holdings, Inc. dated December 5, 2022,
entitled "Lantheus Holdings, Inc. Announces Proposed Offering of $500
Million Convertible Senior Notes due 2027".
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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