Commercial Paper Program
In connection with the transactions, on November 16, 2020, Viatris entered into definitive documentation to establish an unsecured commercial paper program (the “CP Program”) pursuant to which Viatris may issue short-term, unsecured commercial paper notes (the “CP Notes”) pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Mylan Inc., Utah Acquisition Sub and Mylan II (collectively, the “Guarantors”) have agreed to guarantee payment in full of the principal of and interest (if any) on the CP Notes, pursuant to a guarantee. Amounts available under the CP Program may be borrowed, repaid and re-borrowed from time to time, with the aggregate principal amount of CP Notes outstanding under the CP Program at any time not to exceed $1.65 billion.
The net proceeds of issuances of the CP Notes are expected to be used for general corporate purposes. The revolving credit agreement, dated as of June 16, 2020, by and among Viatris, certain lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent (the “Revolving Credit Agreement”), will be available to repay the CP Notes, if necessary. The effectiveness of the CP Program was concurrent with the termination of the commercial paper program, entered into on July 27, 2018, pursuant to which Mylan Inc. issued and Mylan guaranteed short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act (the “Existing CP Program”).
The maturities of the CP Notes will vary but will not exceed 364 days from the date of issue. The CP Notes will be sold under customary terms in the commercial paper market and will be issued at a discount from par, or, alternatively, will be issued at par and bear varying interest rates on a fixed or floating basis.
Initially, three commercial paper dealers will each act as a dealer under the CP Program (each a “Dealer” and, collectively, the “Dealers”) pursuant to the terms and conditions of a commercial paper dealer agreement entered into among Viatris, the Guarantors and each Dealer (each, a “Dealer Agreement”). A national bank will act as issuing and paying agent under the CP Program.
Each Dealer Agreement provides the terms under which the applicable Dealer will either purchase the CP Notes from Viatris or arrange for the sale of the CP Notes by Viatris to one or more purchasers, in each case pursuant to an exemption from federal and state securities laws. Each Dealer Agreement contains customary representations, warranties, covenants and indemnification provisions. The Dealer Agreements are substantially identical in all material respects except as to the parties thereto and the notice provisions. A form of the Dealer Agreements is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
From time to time, one or more of the Dealers and certain of their respective affiliates have provided, and may in the future provide, commercial banking, investment banking and other financial advisory services to Viatris and its affiliates for which they have received or will receive customary fees and expenses. In addition, certain of the Dealers or their affiliates are lenders under the Revolving Credit Agreement and the delayed draw term loan credit agreement, dated as of June 16, 2020, by and among Viatris, Mizuho Bank, Ltd. and MUFG Bank, Ltd., as administrative agent.
The CP Notes have not been and will not be registered under the Securities Act or state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws. The information contained in this Current Report on Form 8-K is neither an offer to sell nor a solicitation of an offer to buy any securities.
Item 1.02.
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Termination of a Material Definitive Agreement.
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In connection with the transactions, on November 16, 2020, Mylan Inc. terminated (i) the $2.0 billion revolving credit agreement, by and among Mylan Inc., Mylan, certain lenders and issuing banks from time to time party thereto and Bank of America, N.A., as administrative agent (the “Existing Revolving Credit Agreement”), and (ii) the commercial paper program, entered into on June 27, 2018, pursuant to which Mylan Inc. issued and Mylan guaranteed short-term, unsecured commercial paper notes pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act (the “Existing CP Program”). There were no material early termination penalties incurred as a result of the termination of the Existing Revolving Credit Agreement and the Existing CP Program.
Item 2.01.
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Completion of Acquisition or Disposition of Assets.
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The information contained in the Introductory Note and Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.