McKesson Corp. entered a credit agreement for a revolving line of credit of up to $4 billion, with Bank of America NA as administrative agent.
The new credit facility, which will mature in September 2024, also includes a $3.6 billion aggregate sublimit of availability in Canadian dollars, British pounds sterling and euros. The facility requires McKesson to maintain a debt-to-capital ratio of not higher than 65%.
Borrowings under the facility bear interest based on the London interbank offered rate, Canadian dealer offered rate for the credit extensions denominated in Canadian dollars, a prime rate or alternative overnight rates as applicable plus agreed margins.
In the event of a default, the lenders may elect to declare any unpaid amounts to be immediately due and payable, among other actions.
McKesson can use funds under the facility for general corporate purposes.
Barclays Bank PLC, Citibank NA, Wells Fargo Bank NA, Goldman Sachs Bank USA, JPMorgan Chase Bank NA, and HSBC Securities (USA) Inc. are co-syndication agents for the new credit agreement.
In connection with the new credit facility, McKesson terminated its prior $3.5 billion five-year senior unsecured revolving credit facility, which was filed with the SEC on Oct. 23, 2015. The prior credit facility was slated to mature in October 2020.
The company had no outstanding borrowings under the prior facility when it was terminated.
Irving, Texas-based McKesson is a healthcare distributor providing pharmaceuticals and medical supplies in the U.S. and internationally.
The company, as well as distributors AmerisourceBergen Corp. and Cardinal Health Inc., have recently come under fire for allegedly fueling the opioid epidemic, which kills about 200 Americans daily. The distributors — which are facing thousands of lawsuits from various U.S. cities and states — have been accused of shipping large amounts of opioids despite red flags of suspicious orders.
The distributors have offered a $10 billion settlement to end litigation in more than 35 states.
