August 23, 2007
BSX pre-pays loans, restructures debt
By Matthew L. Brown
Natick-based Boston Scientific Corp. said this morning that it had refinanced its $5 billion in bank debt and amended its $2 billion revolving credit line in an effort to cut costs.
The company said it had paid $1 billion of its bank loan, making its next payment of $300 million due in 2009. The company said it made the majority of the payment in cash, but borrowed $250 million against its accounts receivable to make up the rest.
For paying the $1 billion chunk, Boston Scientific's banks agreed to relax the rules on the loan and the $2 billion line of credit. Now, the banks, led by Merrill Lynch, will allow Boston Scientific to carry debt equal to 4.5 times its annual earnings before interest taxes, depreciation and amortization. Under the old terms of the loan agreement, Boston Scientific would have had to reduce its debt load to 3.5 times EBITDA by April 2008.
The company is in the midst of drastic cost cutting, and plans to announce layoffs, in an effort to get out from under the debt it incurred in its 2006 purchase of Guidant Corp.
The company said it had paid $1 billion of its bank loan, making its next payment of $300 million due in 2009. The company said it made the majority of the payment in cash, but borrowed $250 million against its accounts receivable to make up the rest.
For paying the $1 billion chunk, Boston Scientific's banks agreed to relax the rules on the loan and the $2 billion line of credit. Now, the banks, led by Merrill Lynch, will allow Boston Scientific to carry debt equal to 4.5 times its annual earnings before interest taxes, depreciation and amortization. Under the old terms of the loan agreement, Boston Scientific would have had to reduce its debt load to 3.5 times EBITDA by April 2008.
The company is in the midst of drastic cost cutting, and plans to announce layoffs, in an effort to get out from under the debt it incurred in its 2006 purchase of Guidant Corp.
WBJ Web Partners
Most Recent
Most Recent
0 Comments