UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 18, 2020, Zimmer Biomet Holdings, Inc. (the “Company”) entered into a 364-day revolving credit agreement, as described below.
The Credit Agreement, dated as of September 18, 2020 (the “Credit Agreement”), is an unsecured revolving credit facility for the Company in the principal amount of $1.0 billion (the “Revolving Facility”) among the Company, Bank of America, N.A., as Administrative Agent, and the lenders party thereto. The Revolving Facility will mature on September 17, 2021, and borrowings under the Revolving Facility will be used for general corporate purposes.
Borrowings under the Credit Agreement will bear interest at floating rates based upon, for Eurodollar-indexed loans, LIBOR for the applicable interest period, or for non-Eurodollar-indexed loans, an alternate base rate, in each case, plus an applicable margin determined by reference to the Company’s senior unsecured long-term debt credit rating.
The Company will pay a facility fee on the aggregate amount of the Revolving Facility at a rate determined by reference to its senior unsecured long-term debt credit rating.
The Credit Agreement contains customary affirmative and negative covenants and events of default for an unsecured financing arrangement, including, among other things, limitations on consolidations, mergers and sales of assets. The Credit Agreement also requires that the Company maintain a consolidated indebtedness to consolidated EBITDA ratio (the “Consolidated Leverage Ratio”) as of the last day of any period of four consecutive fiscal quarters (each such period, a “Test Period”) of no greater than (a) 5.75 to 1.00, for any Test Period ending during the period from September 18, 2020 to and including December 31, 2020, (b) 5.00 to 1.00, for the Test Period ending March 31, 2021, and (c) 4.50 to 1.00, for any Test Period ending after April 1, 2021 (with such maximum permitted Consolidated Leverage Ratio subject to increase to 5.00 to 1.00 for a period of time in connection with a qualified material acquisition on or after July 1, 2021).
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
In the ordinary course of business, certain of the lenders under the Credit Agreement and their affiliates have provided, and may in the future provide, investment banking, commercial banking, cash management, foreign exchange or other financial services to the Company and its affiliates for which they have received, and may in the future receive, compensation.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with the entry into the Credit Agreement, on September 18, 2020, the Credit Agreement, dated as of April 23, 2020 (the “April 2020 Credit Agreement”), among the Company, Bank of America, N.A., as Administrative Agent, and the lenders party thereto, was terminated and is of no further force or effect (except with respect to any obligations and provisions that survive the termination thereof). There were no borrowings outstanding under the April 2020 Credit Agreement at the time it was terminated.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure required by this Item is included in Item 1.01, which is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit |
Description | |
| 10.1 | Credit Agreement, dated as of September 18, 2020, among Zimmer Biomet Holdings, Inc., Bank of America, N.A., as Administrative Agent, and the lenders from time to time party thereto | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: September 21, 2020
| ZIMMER BIOMET HOLDINGS, INC. | ||
| By: | /s/ Chad F. Phipps | |
| Name: | Chad F. Phipps | |
| Title: | Senior Vice President, General Counsel and Secretary | |