Item 1.01
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Entry into a Material Definitive Agreement.
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On September 25, 2019, McKesson Corporation (“McKesson” or the “Company”) entered into a Credit Agreement (“New Credit Facility”), among the Company, as borrower, the lenders party thereto, the letter of credit issuers party thereto, Bank of America, N.A., as administrative agent, and Barclays Bank PLC, Citibank, N.A., Wells Fargo Bank, National Association, Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., and HSBC Securities (USA) Inc., as co-syndication agents.
Under the New Credit Facility, which is scheduled to mature in September 2024, the Company has a revolving line of credit available of up to $4.0 billion and a $3.6 billion aggregate sublimit of availability in Canadian Dollars, British Pounds Sterling and Euros. The New Credit Facility requires that the Company maintain a debt to capital (excluding accumulated other comprehensive income or loss) ratio of no greater than 65%.
Borrowings under the New Credit Facility bear interest based upon the London Interbank Offered Rate, Canadian Dealer Offered Rate for credit extensions denominated in Canadian Dollars, a prime rate or alternative overnight rates as applicable plus agreed margins.
In the event of default under the New Credit Facility, the lenders may elect, among other things, to declare any unpaid amounts obtained under the New Credit Facility to be immediately due and payable.
The Company can use funds obtained under the New Credit Facility for general corporate purposes.
In the ordinary course of their respective businesses, the lenders under the New Credit Facility and their affiliates have engaged, and may in the future engage, in commercial banking and/or investment banking transactions with the Company and its affiliates.
The above description of the New Credit Facility does not purport to be complete and is qualified in its entirety by reference to the executed copy of the New Credit Facility, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Item 1.02
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Termination of a Material Definitive Agreement.
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On September 25, 2019, in connection with the Company’s entry into the New Credit Facility described in Item 1.01 above, the Company terminated the prior $3.5 billion five-year senior unsecured revolving credit facility, dated as of October 22, 2015 (“Prior Credit Facility”), which was filed with the Securities and Exchange Commission on October 23, 2015 as Exhibit 10.1 to McKesson’s Current Report on Form 8-K.
The Prior Credit Facility was scheduled to mature in October 2020, and provided a revolving line of credit available of up to $3.5 billion and a $3.15 billion aggregate sublimit of availability in Canadian Dollars, British Pounds Sterling and Euros. The Prior Credit Facility required that the Company maintain a debt to capital (excluding accumulated other comprehensive income or loss) ratio of no greater than 65%. There were no borrowings outstanding under the Prior Credit Facility at the time of its termination.