Item 1.01 Entry Into a Material Definitive Agreement.
Delayed Draw Term Loan Credit Agreement
On April 9, 2021 (the "Effective Date"), Walgreens Boots Alliance, Inc. (the
"Company") entered into a delayed draw term loan credit agreement (the "Credit
Agreement") with the lenders from time to time party thereto and Wells Fargo
Bank, National Association ("Wells Fargo"), as administrative agent.
The Credit Agreement includes a $2,750,000,000 senior unsecured delayed draw
term loan facility (the "Facility"). The Facility's termination date is the
earliest of (x) the Maturity Date (as defined below), (y) the date of
acceleration of all term loans and termination of all commitments pursuant to
the Credit Agreement and (z) the date of prepayment of all loans and the
termination of all commitments pursuant to the Credit Agreement. "Maturity Date"
shall mean October 9, 2021 (the "Initial Maturity Date"); provided that if the
Closing Date (as defined in the Share Purchase Agreement (as defined below))
shall not have occurred on or prior to the Initial Maturity Date, the Maturity
Date shall be automatically extended to April 8, 2022.
The Company will be the borrower under the Credit Agreement. Subject to the
terms of the Credit Agreement, the Company may borrow under the Facility during
the period commencing on the Effective Date and ending on the earlier of (i) the
date 45 days thereafter and (ii) the date of acceleration of all the loans and
the termination in whole of the commitments under the Facility (such period, the
"Availability Period"). The ability of the Company to request each loan under
the Facility during the Availability Period is subject to the satisfaction (or
waiver) of certain customary conditions set forth therein. Loans under the
Credit Agreement shall be denominated in U.S. dollars.
Borrowings under the Credit Agreement will bear interest at a fluctuating rate
per annum equal to, at the Company's option, the Alternate Base Rate or the
Eurocurrency Rate (each as defined in the Credit Agreement), plus an applicable
margin of (i) on and prior to the Initial Maturity Date, 0.70% in the case of
Eurocurrency Rate loans and 0.00% in the case of Alternate Base Rate loans and
(ii) after the Initial Maturity Date, 0.75% in the case of Eurocurrency Rate
loans and 0.00% in the case of Alternate Base Rate loans.
Voluntary prepayments of the loans and, during the Availability Period,
voluntary reductions of the unutilized portion of the commitments under the
Credit Agreement are permissible, in each case, without penalty, subject to
certain conditions pertaining to minimum notice and minimum reduction amounts as
described in the Credit Agreement. Outstanding loans under the Facility will be
prepaid by the net cash proceeds received by the Company from the sale of its
Alliance Healthcare business pursuant to that certain Share Purchase Agreement
("Share Purchase Agreement"), dated as of January 6, 2021, by and between the
Company and AmerisourceBergen Corporation. Amounts borrowed under the Facility
and repaid or prepaid may not be reborrowed.
The Credit Agreement contains representations and warranties and affirmative and
negative covenants customary for unsecured financings of this type and
substantially consistent with those of the Company's existing revolving credit
agreement, dated as of December 23, 2020, among the Company, the lenders from
time to time party thereto and Wells Fargo, as administrative agent. The Credit
Agreement includes 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 (as those
terms are defined in the Credit Agreement) shall not be greater than 0.60:1.00;
provided that such ratio is subject to increase in certain circumstances set
forth in the Credit Agreement.
The Credit Agreement also contains various events of default (subject to certain
grace periods, to the extent applicable), including, events of default for the
nonpayment of principal, interest or fees, breach of covenants; payment defaults
on, or acceleration under, certain other material indebtedness; inaccuracy of
the representations or warranties in any material respect; bankruptcy or
insolvency; certain unfunded liabilities under employee benefit plans; certain
unsatisfied judgments; certain ERISA violations; and the invalidity or
unenforceability of the Credit Agreement or any note issued in accordance
The foregoing description of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated
herein by reference.
The lenders under the Credit Agreement and/or their affiliates may have in the
past performed, and may in the future from time to time perform, investment
banking, financial advisory, lending and/or commercial banking services, or
other services for the Company and its subsidiaries, for which they have
received, and may in the future receive, customary compensation and expense
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 under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
10.1 Delayed Draw Term Loan Credit Agreement, dated as of April 9, 2021,
by and among Walgreens Boots Alliance, Inc., the Lenders from time to
time party thereto and Wells Fargo Bank, National Association, as
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