Express Scripts 2011 Annual Report Download - page 54

Express Scripts 2011 Annual Report
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BANK CREDIT FACILITY
On August 13, 2010, we entered into a credit agreement with a commercial bank syndicate providing for a three-
year revolving credit facility of $750.0 million. In connection with entering into the credit agreement, we terminated in full
the revolving facility under our prior credit agreement, entered into October 14, 2005 and due October 14, 2010. There was
no outstanding balance in our prior revolving credit facility upon termination. At December 31, 2011, our credit agreement
consists of a $750.0 million revolving credit facility (none of which was outstanding as of December 31, 2011) available
for general corporate purposes.
During the third quarter of 2010, we repaid the Term A and Term-1 loans in full. We made total Term loan
payments of $1,340.0 million during the year ended December 31, 2010.
On August 29, 2011, we entered into a credit agreement (the ―new credit agreement‖) with a commercial bank
syndicate providing for a five-year $4.0 billion term loan facility (the ―term facility‖) and a $1.5 billion revolving loan
facility (the ―new revolving facility‖). The term facility will be available to pay a portion of the cash consideration in
connection with the Medco Transaction, to repay existing indebtedness, and to pay related fees and expenses. The new
revolving facility will be available for general corporate purposes and will replace our $750.0 million credit facility upon
funding of the term facility. Any funding under the new credit agreement will occur concurrently with the consummation of
the Transaction, subject to customary closing conditions. The term facility and new revolving facility both mature on
August 29, 2016. The term facility reduces commitments under the bridge facility discussed below by $4.0 billion. In the
event the merger with Medco is not consummated, the new credit agreement would terminate.
Our credit agreements contain covenants which limit our ability to incur additional indebtedness, create or permit
liens on assets, and engage in mergers, consolidations, or disposals. The covenants also include a minimum interest
coverage ratio and a maximum leverage ratio. At December 31, 2011, we believe we were in compliance in all material
respects with all covenants associated with our credit agreements.
See Note 7 – Financing for more information on our credit facilities.
BRIDGE FACILITY
On August 5, 2011, we entered into a credit agreement with Credit Suisse AG, Cayman Islands Branch, as
administrative agent, Citibank, N.A., as syndication agent, and the other lenders and agents named within the agreement.
The credit agreement provides for a one-year unsecured $14.0 billion bridge term loan facility (the ―bridge facility‖). In the
period leading up to the closing of the merger, we may pursue other financing opportunities to replace all or portions of the
bridge facility, or, in the event that we draw upon the bridge facility, we may refinance all or a portion of the bridge facility
at a later date. The proceeds from these borrowings may be used to pay a portion of the cash consideration to be paid in the
merger and to pay related fees and expenses. The term facility and the net proceeds from the November 2011 Senior Notes,
discussed above, reduced commitments under the bridge facility by $4.0 billion and $4.1 billion, respectively. At December
31, 2011, $5.9 billion is available for borrowing under the bridge facility. The issuance of the February 2012 Senior Notes
further reduced the amount available for borrowing under the bridge facility to $2.4 billion.
The bridge facility contains covenants that restrict our ability to incur additional indebtedness, create or permit
liens on assets and engage in mergers or consolidations other than such agreed upon actions taken in connection with the
Transaction. The covenants also include a minimum interest coverage ratio and a maximum leverage ratio. At December
31, 2011, we believe we were in compliance in all material respects with all covenants associated with the bridge facility.
See Note 7 – Financing for more information on the bridge facility.