Express Scripts 2012 Annual Report Download - page 51

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Express Scripts 2012 Annual Report 49
48
ESI used the net proceeds for the acquisition of WellPoint’s NextRx PBM Business. On June 15, 2012, $1.0
billion aggregate principal amount of the 5.250% Senior Notes due 2012 matured and were redeemed.
On March 18, 2008, Medco issued $1.5 billion of Senior Notes (the “March 2008 Senior Notes”), including:
$300.0 million aggregate principal amount of 6.125% senior notes due 2013
$1,200.0 million aggregate principal amount of 7.125% senior notes due 2018
Medco used the net proceeds to reduce debts held on Medco’s revolving credit facility, which funded the
PolyMedica Corporation (“Liberty”) and CCS Infusion Management, LLC (“CCS”) acquisitions.
In August 2003, Medco issued $500.0 million aggregate principal amount of 7.25% senior notes due 2013 (the
“August 2003 Senior Notes”). On May 7, 2012, the Company redeemed the August 2003 Senior Notes. Total cash
payments related to these notes were $549.4 million comprised of principal, redemption costs and interest.
See Note 7 – Financing for more information on our Senior Notes borrowings.
BANK CREDIT FACILITY
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 was used to pay a portion of the cash consideration paid in
connection with the Merger, as discussed in Note 3 – Changes in business, to repay existing indebtedness and to pay related
fees and expenses. Subsequent to consummation of the Merger on April 2, 2012, the new revolving facility is available for
general corporate purposes and replaced ESI’s $750.0 million credit facility (discussed below) upon funding of the term
facility on April 2, 2012. The term facility and the new revolving facility both mature on August 29, 2016. As of December
31, 2012, no amounts were drawn under the new revolving facility. The Company makes quarterly principal payments on
the term facility. Additionally, during the fourth quarter of 2012, the Company paid down $1,000.0 million of the term
facility. As of December 31, 2012, $2,631.6 million was outstanding under the term facility with an average interest rate of
1.96%, of which $631.6 million is considered current maturities of long-term debt. Upon consummation of the Merger,
Express Scripts assumed the obligations of ESI and became the borrower under the new credit agreement.
On August 13, 2010, ESI entered into a credit agreement with a commercial bank syndicate providing for a three-
year revolving credit facility of $750.0 million (the “2010 credit facility”). The 2010 credit facility was terminated and
replaced by the new revolving facility on April 2, 2012, as described above.
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, 2012, 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, ESI 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 provided for a one-year unsecured $14.0 billion bridge term loan facility (the “bridge facility”). No
amounts were withdrawn under the bridge facility, and subsequent to consummation of the Merger on April 2, 2012, ESI
terminated the bridge facility.
See Note 7 – Financing for more information on the bridge facility.
FIVE-YEAR CREDIT FACILITY
On April 30, 2007, Medco entered into a senior unsecured credit agreement, which was available for general
working capital requirements. The facility consisted of a $1.0 billion, 5-year senior unsecured term loan and a $2.0 billion,
5-year senior unsecured revolving credit facility. The facility was due to mature on April 30, 2012. Medco refinanced the
$2.0 billion senior unsecured revolving credit facility on January 23, 2012. Upon completion of the Merger, the $1.0 billion