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Barclays Bank, Jazz Pharamceuticals Amend Credit Facilities

January 24, 2014, 07:07 AM
Filed Under: Pharmaceuticals

On January 23, 2014, Jazz Pharmaceuticals, as guarantor, and three of its wholly-owned subsidiaries, Jazz Pharmaceuticals, Inc. (the "U.S. Borrower"), Jazz Financing I Limited and Jazz Pharmaceuticals Ireland Limited, as borrowers (collectively with the U.S. Borrower, the "Borrowers"), entered into Amendment No. 2 (the "Amendment") to that certain Credit Agreement, dated as of June 12, 2012 (as amended by Amendment No. 1, dated as of June 13, 2013, the "Existing Credit Agreement" and as amended by the Amendment, the "Amended Credit Agreement"), with the lender parties thereto and Barclays Bank PLC, as administrative agent, collateral agent, letter of credit issuer and swing line lender.

The Amended Credit Agreement provides for (i) a tranche of incremental term loans made to the U.S. Borrower in the aggregate principal amount of $350 million ("Incremental Term Loans"), (ii) a tranche of term loans made to the U.S. Borrower (together with the Incremental Term Loans, the "New Term Loans") to refinance the $554.4 million aggregate principal amount of term loans previously outstanding under the Existing Credit Agreement ("Prior Term Loans") in their entirety and (iii) a revolving credit facility of $425 million (the "Revolving Credit Facility") that replaces the revolving credit facility of $200 million provided for under the Existing Credit Agreement. The Revolving Credit Facility provides for revolving loans to be made to any of the Borrowers. Jazz Pharmaceuticals used the proceeds from the Incremental Term Loans and $300 million of loans under the Revolving Credit Facility to purchase the Ordinary Shares and ADSs properly tendered and accepted for payment at the expiration of the Offer as of January 22, 2014, and expects to use the proceeds from future loans under the Revolving Credit Facility, if any, for general corporate purposes, including corporate development activities. The New Term Loans have the same June 12, 2018 maturity date that was applicable to the Prior Term Loans. Loans under the Revolving Credit Facility will have the same June 12, 2017 maturity date that was applicable under the Existing Credit Agreement.

The New Term Loans bear interest, at the U.S Borrower's option, at a rate equal to either the LIBOR rate, plus an applicable margin of 2.50% per annum (subject to a 0.75% LIBOR floor), or the prime lending rate, plus an applicable margin equal to 1.50% per annum (subject to a 1.75% prime rate floor). Loans under the Revolving Credit Facility will bear interest, at the applicable Borrower's option, at a rate equal to either the LIBOR rate, plus an applicable margin of 2.50% per annum, or the prime lending rate, plus an applicable margin equal to 1.50% per annum, subject to reduction by 0.25% or 0.50% based upon Jazz Pharmaceuticals' secured leverage ratio (as defined in the Amended Credit Agreement).

The Borrowers' obligations under the Amended Credit Agreement and any hedging or cash management obligations entered into with a lender are guaranteed by Jazz Pharmaceuticals and each of Jazz Pharmaceuticals' existing and subsequently acquired or organized direct and indirect subsidiaries (other than certain immaterial subsidiaries, subsidiaries whose guarantee would result in material adverse tax consequences and subsidiaries whose guarantee is prohibited by applicable law). Jazz Pharmaceuticals, the Borrowers and such guarantors are collectively referred to in this Current Report on Form 8-K as the "Loan Parties."

The Loan Parties' obligations under the Amended Credit Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (a) all tangible and intangible assets of the Loan Parties, except for certain excluded assets, and (b) all of the equity interests of the subsidiaries of the Loan Parties held by the Loan Parties (limited, in the case of the equity interests of certain foreign subsidiaries and certain domestic subsidiaries that hold no assets other than equity interests of foreign subsidiaries, to 65% of the voting equity interests of such subsidiaries).

The Borrowers are permitted to make voluntary prepayments at any time without payment of a premium, except that a 1% premium would apply to a repayment in connection with a repricing of, or any amendment to the Amended Credit Agreement resulting in a repricing of, the New Term Loans effected on or prior to the date that is six months following the January 23, 2014 effective date of the Amendment. The U.S Borrower is required to make mandatory prepayments of New Term Loans (without payment of a premium) with (1) net cash proceeds from certain non-ordinary course asset sales (subject to reinvestment rights and other exceptions), (2) net cash proceeds from issuances of debt (other than certain permitted debt), (3) beginning with the fiscal year ending December 31, 2014, 50% of Jazz Pharmaceuticals' excess cash flow (subject to decrease to 25% or 0% if Jazz Pharmaceuticals' secured leverage ratio is equal to or less than 2.25 to 1.00 (and greater than 1.25 to 1.00) or 1.25 to 1.00, respectively), and (4) casualty proceeds and condemnation awards (subject to reinvestment rights and other exceptions). The New Term Loans will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount thereof, with any remaining balance payable on the final maturity date of the New Term Loans.

View the full text of this SEC filing here.







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