- Illumina entered into a $750 million five-year revolving credit agreement with Bank of America to finance its working capital needs and for general corporate purposes.
- The agreement replaces another $750 million credit facility that Illumina secured from Bank of America in 2021. Most of the publicly disclosed terms of the agreements are the same.
- The new funding comes as European regulators seek the cancelation of Illumina’s takeover of Grail and as a downturn in the global economy has hurt investor confidence in the company, pushing its share price below $200 for the first time since 2017.
The financial regulatory filing issued by Illumina to disclose the new $750 million credit facility is almost identical to its statement about the 2021 agreement. One of the options for setting the variable interest rate is now the “term secured overnight financing rate,” not the “eurocurrency,” and “a credit spread adjustment equal to 0.10% per annum” will apply to loans bearing interest based on the new option.
Other changes are the resetting of the date on when payment is due, from March 8, 2026 to Jan. 4, 2028, and updates to the information about the bankers on the other side of the deal.
The credit agreement follows a 12-month period where Illumina’s share price fell by 45%, briefly dropping below $190 over the holidays before rebounding to above $200 in the new year. Illumina’s share price slid amid investor concerns about the Grail acquisition and broader macroeconomic pressures on the business.
With the European Commission labeling the Grail takeover anti-competitive, Illumina may have to undo the deal and pay a fine of as much as 10% of its annual revenue. While Grail has progressed since the Illumina deal, it also has delivered data that lowered expectations for its multi-cancer screening test, with the positive predictive value in a key trial falling between the interim and final analyses.