Augusta SpinCo Corp 8-K

What Happened

• Augusta SpinCo Corporation (a BD subsidiary) announced a Term Loan Credit Agreement effective January 8, 2026 with lenders led by Barclays Bank PLC as administrative agent. The facility allows a single borrowing of up to $4.0 billion (unsecured) to finance a cash distribution to Becton, Dickinson and Company (“BD”) (the “BD Special Cash Payment”) and, if remaining proceeds are available, a possible cash distribution to Waters stockholders under the Merger Agreement. Loans are not yet funded and are available only if certain closing conditions are met; the filing was made on January 12, 2026.
• Facility structure: Tranche 1 — up to $3.5 billion due 364 days after the Closing Date; Tranche 2 — up to $500 million due on the second anniversary of the Closing Date. Interest is variable (alternate base rate or Term SOFR plus an applicable margin tied to Waters’ public debt ratings). Barclays is the administrative agent.

Key Details

• Effective date: January 8, 2026; 8-K filed January 12, 2026.
• Total availability: up to $4,000,000,000 (single borrowing on Closing Date; unsecured).
• Maturities: Tranche 1 = 364 days after Closing; Tranche 2 = 2nd anniversary of Closing.
• Interest margins: Term SOFR + 87.5–135 bps (plus step-ups for Tranche 1 every 90 days up to +25 bps); alternate base rate + 0–35 bps. Undrawn commitment fee: 10 bps per year from Effective Date until Closing or termination.
• Covenants: post-closing leverage ratio max 3.50:1.00 (can be increased to 4.25:1.00 in certain material-acquisition circumstances) and an interest coverage ratio of at least 3.50:1.00 (subject to certain rating-based exceptions).
• Commitment termination triggers include (a) consummation of required cash payments without use of the loan, (b) termination of the Merger Agreement, or (c) the fifth business day after the Merger Agreement “Outside Date” without the Acquisition Effective Date.

Why It Matters

• This credit agreement creates a direct potential financial obligation for Augusta SpinCo of up to $4.0B to fund required cash distributions tied to the BD–Waters Reverse Morris Trust combination. The loans are unsecured but include financial covenants and default provisions that will apply after the Acquisition Effective Date.
• For investors, the key takeaways are that (1) the debt is conditional and not yet drawn, (2) if drawn it will increase leverage and subject Augusta SpinCo (and the combined company post-closing) to maintenance covenants that could affect financial flexibility, and (3) interest costs and mandatory/automatic prepayment rules could affect cash flow depending on future asset sales, financings or ratings.