Royalty Pharma plc 8-K

What Happened

• On May 22, 2026, Royalty Pharma plc filed an 8‑K to announce it, Royalty Pharma Holdings Ltd (a consolidated non‑wholly owned subsidiary) and Royalty Pharma Manager, LLC entered into a new Revolving Credit Agreement with Bank of America, N.A. as Administrative Agent and other lenders. The new agreement refinanced and replaced the company’s September 15, 2021 credit agreement; at effectiveness all outstanding obligations under the prior agreement were repaid and prior commitments terminated.

Key Details

• Facility size: $1.8 billion unsecured revolving credit facility.
• Maturity: May 22, 2031.
• Borrower/Guarantors: Royalty Pharma plc is borrower; Royalty Pharma Holdings Ltd and Royalty Pharma Manager, LLC are guarantors.
• Pricing: Option of a base rate (highest of agent’s prime, federal funds +0.5%, or Term SOFR +1%) or Daily SOFR/alternative currency rates, each plus an applicable margin; unused commitment fee applies (pricing grid).
• Financial covenants: consolidated leverage ratio ≤4.00:1.00 (≤4.50:1.00 after a qualifying material acquisition); consolidated portfolio cash flow ratio ≤5.00:1.00 (≤5.50:1.00 after qualifying acquisition); consolidated coverage ratio ≥2.50:1.00 of Adjusted EBITDA to consolidated interest expense.
• Document: Revolving Credit Agreement is filed as Exhibit 10.1 to the Form 8‑K.

Why It Matters

• This new revolver provides Royalty Pharma with up to $1.8B of liquidity and extends the company’s committed financing runway through 2031, reducing near‑term refinancing risk.
• The agreement is unsecured and includes standard covenants and financial ratio tests that could limit leverage, liens or certain transactions if the company’s metrics deteriorate. Investors should watch future borrowings under the facility, interest costs tied to rate options (SOFR vs. base rate), and the company’s compliance with the leverage and coverage covenants.