Express Scripts 2011 Annual Report Download - page 74

Express Scripts 2011 Annual Report
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0.10% to 0.55% for the new revolving facility, depending on our consolidated leverage ratio. Under the new credit
agreement, we are required to pay commitment fees on the unused portion of the $1.5 billion new revolving facility.
The commitment fee ranges from 0.15% to 0.20% depending on our consolidated leverage ratio. Until the funding
date, we will also pay a ticking fee on the commitments under the term facility.
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 Medco 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 (see
Note 3 – Changes in business). The term facility discussed above reduced commitments under the bridge facility by
$4.0 billion. The net proceeds from the November 2011 Senior Notes discussed below reduced the commitments
under the bridge facility by $4.1 billion. At December 31, 2011, $5.9 billion is available for borrowing under the
bridge facility. See Note 15 – Subsequent event for discussion of additional reduction due to financing transactions
subsequent to December 31, 2011.
The bridge facility requires us to pay interest at the greater of LIBOR or adjusted base rate options, plus a
margin. The margin over LIBOR ranges from 1.25% to 1.75%, and the margin over the adjusted base rate options
ranges from 0.25% to 0.75%, depending on our consolidated leverage ratio. The margin will increase by 0.25% on
the 90th day after the funding date of the facility and by an additional 0.25% every 90 days thereafter. Until the
funding date, we will also pay a ticking fee on the commitments under the bridge facility.
SENIOR NOTES
On June 9, 2009, we issued $2.5 billion of Senior Notes (the ―June 2009 Senior Notes‖), including:
$1.0 billion aggregate principal amount of 5.250% Senior Notes due 2012
$1.0 billion aggregate principal amount of 6.250% Senior Notes due 2014
$500 million aggregate principal amount of 7.250% Senior Notes due 2019
The June 2009 Senior Notes require interest to be paid semi-annually on June 15 and December 15. We
may redeem some or all of each series of June 2009 Senior Notes prior to maturity at a price equal to the greater of
(1) 100% of the aggregate principal amount of any notes being redeemed, plus accrued and unpaid interest; or (2)
the sum of the present values of the remaining scheduled payments of principal and interest on the notes being
redeemed, not including unpaid interest accrued to the redemption date, discounted to the redemption date on a
semiannual basis at the treasury rate plus 50 basis points with respect to any notes being redeemed, plus in each
case, unpaid interest on the notes being redeemed accrued to the redemption date. The June 2009 Senior Notes are
jointly and severally and fully and unconditionally (subject to certain customary release provisions, including sale,
exchange, transfer or liquidation of the guarantor subsidiary) guaranteed on a senior unsecured basis by most of our
current and future 100% owned domestic subsidiaries. We used the net proceeds for the acquisition of WellPoint’s
NextRx PBM Business.
On May 2, 2011, we issued $1.5 billion aggregate principal amount of 3.125% Senior Notes due 2016 (the
―May 2011 Senior Notes‖). The May 2011 Senior Notes require interest to be paid semi-annually on May 15 and
November 15. We may redeem some or all of the May 2011 Senior Notes prior to maturity at a price equal to the
greater of (1) 100% of the aggregate principal amount of any notes being redeemed, plus accrued and unpaid
interest; or (2) the sum of the present values of the remaining scheduled payments of principal and interest on the
notes being redeemed, not including unpaid interest accrued to the redemption date, discounted to the redemption
date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus
20 basis points with respect to any May 2011 Senior Notes being redeemed, plus in each case, unpaid interest on the
notes being redeemed accrued to the redemption date. The May 2011 Senior Notes are jointly and severally and
fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or
liquidation of the guarantor subsidiary) guaranteed on a senior basis by most of our current and future 100% owned
domestic subsidiaries. We used the net proceeds to repurchase treasury shares.