Alkermes Closes Debt Refinancing
Alkermes (NASDAQ: ALKS) today announced that it has successfully completed the refinancing of its previously outstanding senior secured bank debt and reduced the company's overall debt outstanding from approximately $450 million to $375 million. The new term loans will have a lower blended interest rate of 4.4% compared to the prior blended interest rate of 7.6%, and the refinancing is expected to result in savings of approximately $18 million in cash interest annually.
“Our business has performed well and is generating positive cash flows, allowing us to reduce our overall debt. This solid performance enabled us to obtain improved credit ratings and take advantage of favorable market conditions to secure attractive debt terms,” said James Frates, Chief Financial Officer of Alkermes. “In connection with the refinancing, we are updating our financial expectations to reflect the favorable impact of this transaction.”
The new debt is comprised of senior secured, covenant-lite First Lien Term Loan facilities consisting of a $300 million, seven-year Term Loan bearing interest at LIBOR plus 3.50% and a $75 million, four-year Term Loan bearing interest at LIBOR plus 3.00%. Under each of these term loans, LIBOR is subject to an interest rate floor of 1.00%.
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