Walgreens Credit Agreement

Recently, Walgreens Boots Alliance, Inc. (“the Company”) has taken steps to increase its cash position and maintain financial flexibility in the face of on-date uncertainty in global markets, including the execution of new credit agreements and amendments to existing credit agreements described below. As of April 3, 2020, the Company had entered into new revolving credit facilities of $3.1 billion. There are no bonds outstanding under these facilities. In addition, subject to the satisfaction of certain conditions, the Company has extended a $1.0 billion facility, which is expected to mature in 2020 until May 2021. Walgreens and the limited liability company WBA Financial Services Limited will be the borrowers under the HSBC loan agreement. Under the terms of the agreement, the bonds will bear interest at an annual fluctuating interest rate equal to either the euro exchange rate plus an applicable margin of 1.50% or the alternative base rate. The Company also secured a new $1 billion unsecured senior unsecured revolving credit facility from Wells Fargo Bank NA and an existing $2 billion senior unsecured revolving credit facility. Walgreens has also entered into an amendment to its loan agreement with Sumitomo Mitsui Banking Corp., which includes a $500 million senior unsecured loan and another $500 million revolving loan. The bilateral revolving credit agreement contains representations and guarantees, as well as usual positive and negative obligations for such unsecured financing, which are substantially consistent with those of the Company`s existing revolving credit agreement (i) dated August 30, 2019 between the Company, the lenders from time to time and Citibank, N.A., as administrative agents. (ii) an existing revolving credit agreement dated August 30, 2019 between the Company, the lenders from time to time and HSBC Bank USA, N.A., as administrative agent and (iii) an existing revolving credit agreement dated August 30, 2019 between the Company, the lenders from time to time and UniCredit Bank AG, New York branch, as a management agent.

The bilateral revolving credit agreement contains a financial agreement that stipulates that from the last day of each fiscal quarter, from the first full quarter ending after the effective date, the ratio of consolidated debt to total capitalization (as these terms are defined in the bilateral revolving credit agreement) shall not exceed 0.60:1.00; provided that that ratio can be increased in certain circumstances set out in the bilateral revolving credit agreement […].