L.O.T.W. #153 - Emergent BioSolutions: Vital Signs Improving - Lender Refi Cuts 200 bps and Extends Runway
Closes $150 million OrbiMed-led senior secured term loan to refinance its 2024 Oak Hill facility; concurrently right-sizes Wells Fargo ABL revolver from $100 million to $50 million
In April 2026, Emergent BioSolutions Inc. a specialty biopharmaceutical and biodefense company in the middle of a multi-year turnaround, closed a coordinated refinancing of its non-revolver debt stack. A new $150 million senior secured Term Loan from OrbiMed Royalty & Credit Opportunities V, LP was used to retire all amounts outstanding under the company’s August 2024 term loan with Oak Hill Advisors, with management citing a 200 basis point annual reduction in interest expense relative to the prior facility. Concurrently, Emergent and Wells Fargo executed Amendment No. 1 to the September 2024 ABL credit agreement, right-sizing the revolving commitment from $100 million to $50 million and pushing maturity out to match the new term loan.
👓At a Glance
Origination Date: April 16, 2026
Borrower: Emergent BioSolutions, Inc.
Term Loan Lender: OrbiMed Royalty & Credit Opportunities
Term Loan - $150 million initial term loan; $75 million delayed draw term loan
Uncommitted incremental facility equal to greater of i) $200 million or ii) 80% of trailing four-quarter consolidated EBITDA, plus additional leverage-based capacity
ABL Lender: Wells Fargo Bank
ABL Loan - $50 million
Use of Proceeds: Repay and terminate the August 30, 2024 Oak Hill Advisors term loan facility; finance permitted acquisitions and growth capex
Source: SEC 8-K
📷Borrower Snapshot
Sector: Healthcare
Subsector: Biotechnology
Commercial Stage: Revenue Generating; LTM EBITDA +
Business Overview: Emergent BioSolutions is a Gaithersburg, Maryland–based specialty biopharmaceutical company focused on developing, manufacturing, and commercializing medical countermeasures and other products that protect against public health threats, with a 25-plus year operating history. Its commercial portfolio includes products targeting smallpox, mpox, botulism, Ebola, anthrax, and opioid overdose emergencies (most prominently the over-the-counter naloxone nasal spray franchise).
⚙️Structure & Terms
Source: SEC 8-K
Term Loan Agreement
Structure:
Initial Term Loan - $150 million; drawn in full at close
Delayed Draw Term Loan - $75 million; 24 month availability post-closing
DDTL Draw Condition - consolidated secured leverage ratio not to exceed 1.75:1.00
Uncommitted Incremental Term Loan - Greater of $200 million or 80% of trailing four-quarter consolidated EBITDA, plus additional leverage-based capacity
Maturity:
Earliest of (i) April 16, 2031, (ii) acceleration upon Event of Default, and (iii) 91 days prior to the scheduled maturity of the 3.875% senior unsecured notes due 2028 - but only if the aggregate principal amount of notes outstanding at such date exceeds $75 million and the company does not have liquidity equal to $75 million plus the amount necessary to repay the notes in full
Repayment: Bullet at maturity; no scheduled amortization
50% excess cash flow sweep (commencing with fiscal year 2027); with step-downs based on the company’s consolidated total leverage ratio
Collateral: First-priority security interest and lien on term loan priority collateral; second-priority security interest and lien on ABL priority collateral (split-lien intercreditor with the Wells Fargo ABL)
Rate: Term SOFR + 6.25% per annum, subject to a Term SOFR floor of 3.00% (resulting in an effective interest rate floor of 9.25%)
Disclosed Fees:
Undrawn Fee - 1.00% per annum on the undrawn portion of the Delayed Draw Term Loan, payable quarterly during the 24-month availability period
Make-whole - 3% plus present value of each interest payment through prepayment event and 2 year anniversary of closing; 3% from 2nd to 3rd anniversary; 2% from 3rd through 4th anniversary; par thereafter
Financial Covenant:
Consolidated Total Leverage Ratio: Not to exceed 5.25:1.00, tested every fiscal quarter commencing with the fiscal quarter ending September 30, 2026
ABL Credit Agreement Amendment
Original Agreement: Credit Agreement dated September 30, 2024
Amendment: Amendment No. 1 to Credit Agreement, dated April 16, 2026
Post-Amendment Commitment: $50 million revolving loan commitment, with a customary letter of credit sublimit
Maturity: Earliest of (a) April 16, 2031, (b) 91 days prior to the scheduled maturity of the OrbiMed term loan, (c) 91 days prior to the scheduled maturity of the 3.875% senior unsecured notes due 2028
Collateral Position: First-priority lien on ABL priority collateral; second-priority lien on term loan priority collateral
Borrowing Base - Multi-Jurisdictional:
The facility includes separate U.S., Canadian, and Irish borrowing base components, each with its own eligibility criteria and advance rates and aggregating into the global borrowing base.
Pricing Grid: Tied to consolidated total leverage ratio
Level I - consolidated total leverage < 4.00:1.00; base rate margin = 0.75%; Term SOFR margin = 1.75%
Level II - consolidated total leverage ≥ 4.00:1.00; base rate margin =1.25%; Term SOFR margin = 2.25%
Cash Dominion: Customary cash dominion mechanics - deposit accounts of the loan parties are subject to springing lender control. Upon an “application event” — defined to include (a) excess availability falling below a (redacted) threshold for a specified number of consecutive business days and (b) the occurrence and continuation of an event of default — collected funds are swept daily to the agent’s account and applied to outstanding obligations.
Financial Covenants:
Fixed Charge Coverage Ratio: Springing maintenance covenant; tested only when excess availability falls below a specified threshold (threshold redacted) for a defined number of consecutive business days and continuing until excess availability is restored above the threshold for a specified period
Minimum Liquidity / Consolidated Total Leverage Ratio: Liquidity floor / leverage ceiling covenant package (specific numerical thresholds redacted)