The Revolving Credit Facility will initially bear interest at the LIBO, EURIBO or TIBO (“Eurocurrency”) Rate or SONIA (in each case, determined in accordance with the Amended and Restated Revolving Credit Agreement), as applicable, plus 1.20% per annum, if Viatris chooses to make Eurocurrency or SONIA borrowings, or at a base rate (determined in accordance with the Amended and Restated Revolving Credit Agreement) plus 0.20% per annum. The Revolving Credit Facility has a facility fee, which currently accrues at 0.175% on the daily amount of the aggregate revolving commitments of the lenders. The applicable margins over the Eurocurrency Rate and the base rate for the revolver can fluctuate based on the long-term unsecured senior, non-credit enhanced debt rating of Viatris by S&P Global Ratings, Moody’s Investors Service, Inc. and Fitch Ratings, Inc.
The Amended and Restated Revolving Credit Agreement contains customary affirmative covenants for facilities of this type, including among others, covenants pertaining to the delivery of financial statements, notices of default and certain material events, maintenance of corporate existence and rights, property, and insurance and compliance with laws, as well as customary negative covenants for facilities of this type, including limitations on the incurrence of subsidiary indebtedness, liens, mergers and certain other fundamental changes, investments and loans, acquisitions, transactions with affiliates, payments of dividends and other restricted payments and changes in Viatris’ lines of business. The Amended and Restated Revolving Credit Agreement contains a financial covenant requiring maintenance of a leverage ratio no greater than 4.25 to 1.00 as of the last day of each fiscal quarter ending after the Revolver Closing Date through and including the fiscal quarter ending June 30, 2022, 4.00 to 1.00 as of the last day of each fiscal quarter ending after June 30, 2022 through and including the fiscal quarter ending December 31, 2022 and 3.75 to 1.00 as of the last day of any fiscal quarter thereafter. The Revolving Credit Facility is scheduled to expire on the date that is five years from the Revolver Closing Date.
The Amended and Restated Revolving Credit Agreement contains default provisions customary for facilities of this type, which are subject to customary grace periods and materiality thresholds, including, among others, defaults related to payment failures, failure to comply with covenants, material misrepresentations, defaults under other material indebtedness, the occurrence of a “change in control”, bankruptcy and related events, material judgments, certain events related to pension plans and the invalidity or revocation of any loan document or any guarantee agreement of Viatris or any subsidiary that becomes a guarantor as described above. If an event of default occurs under the Amended and Restated Revolving Credit Agreement, the lenders may, among other things, terminate their commitments and declare immediately payable all borrowings. The default provisions in the Amended and Restated Revolving Credit Agreement are applicable only from and after the Revolver Closing Date.
Amounts drawn on the Revolving Credit Facility become due and payable on the date that is five years from the Revolver Closing Date. Amounts drawn on the Revolving Credit Facility may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of Eurocurrency and SONIA borrowings.
The foregoing summary of the Amended and Restated Revolving Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Amended and Restated Revolving Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Term Loan Credit Agreement
On July 1, 2021, Viatris entered into a term loan credit agreement (the “Term Loan Credit Agreement”), by and among Viatris, certain affiliates and subsidiaries of Viatris as guarantors, each Lender from time to time party thereto and Mizuho Bank, Ltd., as administrative agent. The Term Loan Credit Agreement provides for a ¥40,000,000,000 principal amount senior unsecured term loan facility (the “Term Loan Credit Facility”).