Royalty Pharma plc filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 22, 2026, Royalty Pharma plc (the “Company”), Royalty Pharma Holdings Ltd, a non-wholly owned consolidated subsidiary of the Company (“RPH”), and Royalty Pharma Manager, LLC (“RPM”) entered into that certain Revolving Credit Agreement with Bank of America, N.A., as Administrative Agent (the “Administrative Agent”) and the other lenders thereto (the “Credit Agreement”). The Company is the borrower under the Revolving Credit Facility referred to below and RPH and RPM are guarantors under the Revolving Credit Facility. The Credit Agreement refinanced and replaced in its entirety that certain Revolving Credit Agreement, dated as of September 15, 2021, among the Company as Borrower, RPH, the Administrative Agent and the lenders thereto (as amended, restated, amended and restated, supplemented or otherwise modified, the “Existing Credit Agreement”), and at effectiveness of the Credit Agreement, all obligations outstanding under the Existing Credit Agreement were repaid and all commitments under the Existing Credit Agreement were terminated in full.
The Credit Agreement provides for an unsecured revolving credit facility (the “Revolving Credit Facility”) in an amount equal to $1.8 billion that is subject to an interest rate, at our option, of either (a) a base rate determined by reference to the highest of (1) the administrative agent’s prime rate, (2) the federal funds rate plus 0.5% and (3) Term SOFR plus 1% or (b) Daily SOFR, the Alternative Currency Term Rate or the Alternative Currency Daily Rate (each as defined in the Credit Agreement), plus in each case, the applicable margin. There is also a commitment fee payable on the unused portion of the Revolving Credit Facility, the rate of which is determined by a pricing grid. The Credit Agreement that governs the Revolving Credit Facility contains certain customary covenants, that among other things, require us to maintain (i) a consolidated leverage ratio at or below 4.00 to 1.00 (or at or below 4.50 to 1.00 following a qualifying material acquisition) of funded debt to Adjusted EBITDA, each as defined and calculated with the ratio level calculated with further adjustments as set forth in the Credit Agreement, (ii) a consolidated portfolio cash flow ratio at or below 5.00 to 1.00 (or at or below 5.50 to 1.00 following a qualifying material acquisition) and (iii) a consolidated coverage ratio at or above 2.50 to 1.00 of Adjusted EBITDA to consolidated interest expense, each as defined and calculated with further adjustments as set forth in the Credit Agreement. The Credit Agreement includes customary covenants for credit facilities of its type that limit the ability to engage in certain activities, such as entities that are not obligors under the Credit Agreement incurring additional indebtedness, the incurrence of liens and the consummation of certain merger or other fundamental change transactions with respect to obligors under the Revolving Credit Facility. The Revolving Credit Facility will mature on May 22, 2031.
The foregoing summary of the Credit Agreement is qualified by reference to the terms of the Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information described above under Item 1.01 of this report is incorporated into this Item 2.03 by reference.
| Item 9.01. | Financial Statements and Exhibits |
(d) Exhibits
| 10.1 | Revolving Credit Agreement, dated as of May 22, 2026, among Royalty Pharma plc, Royalty Pharma Holdings Ltd, Bank of America, N.A., as Administrative Agent, the other parties thereto, and the lenders and issuing banks from time to time party thereto. | |
| 104 | Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL) | |
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.
| ROYALTY PHARMA PLC | ||||||
| Date: May 28, 2026 | By: | /s/ Terrance Coyne | ||||
| Terrance Coyne | ||||||
| Chief Financial Officer | ||||||