Alkermes plc. Debt Disclosure
12. LONG-TERM DEBT
Long-term debt consists of the following:
|
|
December 31, |
|
|
December 31, |
|
||
(In thousands) |
|
2023 |
|
|
2022 |
|
||
2026 Term Loans, due March 12, 2026 |
|
$ |
290,730 |
|
|
$ |
293,270 |
|
Less: current portion |
|
|
(3,000 |
) |
|
|
(3,000 |
) |
Long-term debt |
|
$ |
287,730 |
|
|
$ |
290,270 |
|
The Company’s outstanding term loans mature on March 12, 2026 (the “2026 Term Loans”). In June 2023, the Company amended the 2026 Terms Loans to transition the interest rate available for borrowings thereunder from a London Interbank Offered Rate (“LIBOR”)-based interest rate to an interest rate based on the Secured Overnight Financing Rate (“SOFR”) and to make other conforming and mechanical changes. The 2026 Term Loans bear interest at SOFR plus a credit spread adjustment applicable to the interest period and an applicable margin of 2.50% with a floor of 0.5%.
The 2026 Term Loans have an incremental facility capacity in the amount of $175.0 million plus additional potential amounts, provided that the Company meets certain conditions, including a specified leverage ratio. The 2026 Term Loans include a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries. The 2026 Term Loans also contain customary affirmative covenants and events of default. The Company was in compliance with its debt covenants at December 31, 2023.
Scheduled maturities with respect to the 2026 Term Loans are as follows (in thousands):
Year Ending December 31: |
|
|
|
|
2024 |
|
$ |
3,000 |
|
2025 |
|
|
3,000 |
|
2026 |
|
|
285,750 |
|
Total |
|
$ |
291,750 |
|
The Company is subject to mandatory prepayments of principal if certain excess cash flow thresholds, as defined in the 2026 Term Loans, are met. To date, the Company has not been required to make any such mandatory prepayments.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2023 | Feb 21, 2024 | Showing above |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 13, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 25, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.