STERIS plc (STE, Financial), along with its subsidiaries STERIS Corporation, STERIS Limited, and STERIS Irish FinCo Unlimited Company, has entered into a significant financial arrangement with various lenders, facilitated by JPMorgan Chase Bank, N.A. This new revolving credit agreement, effective October 7, 2024, establishes a $1.1 billion revolving credit facility, replacing the previous agreement from March 19, 2021.
The newly established credit facility, referred to as the "Revolver," is designed to support STERIS's general corporate purposes and working capital needs. It offers flexibility through revolving credit borrowings, swing line borrowings, and letters of credit, with specific sublimits for each. Notably, the Revolver has the potential to be increased by up to $625 million, contingent on lender discretion.
The Revolver is structured to mature five years from its inception date, with all outstanding borrowings and accrued interest due at that time. Interest rates are variable, based on either the Base Rate or the Relevant Rate, plus an Applicable Margin determined by STERIS's Debt Rating. The agreement allows for prepayment of Base Rate Advances without penalty, although prepayments of Term Benchmark Advances may incur a breakage fee.
Additionally, the Revolver accommodates advances in U.S. Dollars or specified alternative currencies, with a cap on Alternative Currency Advances equivalent to $625 million. The agreement includes customary representations, warranties, and covenants, such as restrictions on non-guarantor subsidiary indebtedness and lien creation, alongside financial covenants like leverage limitations and minimum interest coverage requirements.
In the event of default, which includes payment failures, covenant breaches, or changes in control, lenders have the right to accelerate the maturity of the indebtedness. STERIS and its subsidiaries maintain other banking relationships with several of the participating lenders, underscoring the strategic nature of this financial arrangement.
This development marks a pivotal step for STERIS plc in enhancing its financial flexibility and supporting its ongoing growth initiatives. For a comprehensive understanding of the Revolving Credit Agreement, stakeholders are encouraged to review the full document filed as Exhibit 10.1.
Should you invest in Steris PLC (STE, Financial) right now? Before you do it, it’s important to understand the business profitability and stock valuations, and find out what the warning signs are about. See the in-depth Steris PLC (STE) stock research here.
