Debt	9 Months Ended
Sep. 30, 2019
Debt
Debt	7. Debt Unsecured Revolving Credit Facility - Credit Agreement In June 2018, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent and a swingline lender, and various other lender parties, providing for: (1) an unsecured revolving credit facility of up to $1.0 billion; and (2) a second unsecured revolving credit facility of up to $500.0 million (which facilities may, at our request, be increased by up to $300.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In accordance with the terms of the Credit Agreement, in June 2019, we extended the maturity date of the Credit Agreement by one year, to June 2024. The Credit Agreement provides the lenders the ability to extend the maturity date by one additional year to June 2025 if we request such an extension. At our option, amounts borrowed under the Credit Agreement bear interest at either the LIBOR rate or a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based on our consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at LIBOR plus an applicable margin. In connection with the Credit Agreement, we incurred debt issuance costs in June 2018 of $13.2 million, $12.6 million of which were capitalized and are being amortized over the term of the Credit Agreement. On June 27, 2018 we borrowed $250.0 million under the Credit Agreement and used the funds to repay outstanding indebtedness under a prior credit agreement. On January 24, 2019, we paid an upfront payment of $800.0 million related to our exclusive license agreement with Arena Pharmaceuticals, Inc. (Arena) and funded the payment by borrowing $800.0 million under the Credit Agreement. On September 30, 2019, we paid down $50.0 million on our revolving credit facility under the Credit Agreement. This brought our aggregate outstanding balance under the Credit Agreement to $1.0 billion as of September 30, 2019. Although our credit facility matures in 2024, we classified $250.0 million of the outstanding balance as a current liability on our consolidated balance sheet as we intend to repay this amount within one year. The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of September 30, 2019, we were in compliance with these covenants. Lung Biotechnology PBC is our only subsidiary that guarantees our obligations under the Credit Agreement though, from time to time, one or more of our other subsidiaries may be required to guarantee our obligations. During the three and nine months ended September 30, 2019, we recorded $11.7 million and $34.2 million of interest expense, respectively, related to the Credit Agreement. During the three and nine months ended September 30, 2018, we recorded $4.1 million and $9.6 million of interest expense, respectively, related to a prior credit agreement.

Debt

9 Months Ended

Sep. 30, 2019

7. Debt

Unsecured Revolving Credit Facility - Credit Agreement

In June 2018, we entered into a credit agreement (the Credit Agreement) with Wells Fargo Bank, National Association (Wells Fargo), as administrative agent and a swingline lender, and various other lender parties, providing for: (1) an unsecured revolving credit facility of up to $1.0 billion; and (2) a second unsecured revolving credit facility of up to $500.0 million (which facilities may, at our request, be increased by up to $300.0 million in the aggregate subject to obtaining commitments from existing or new lenders for such increase and other conditions). In accordance with the terms of the Credit Agreement, in June 2019, we extended the maturity date of the Credit Agreement by one year, to June 2024. The Credit Agreement provides the lenders the ability to extend the maturity date by one additional year to June 2025 if we request such an extension.

At our option, amounts borrowed under the Credit Agreement bear interest at either the LIBOR rate or a fluctuating base rate, in each case, plus an applicable margin determined on a quarterly basis based on our consolidated ratio of total indebtedness to EBITDA (as calculated in accordance with the Credit Agreement). To date, we have elected to calculate interest on the outstanding balance at LIBOR plus an applicable margin. In connection with the Credit Agreement, we incurred debt issuance costs in June 2018 of $13.2 million, $12.6 million of which were capitalized and are being amortized over the term of the Credit Agreement.

On June 27, 2018 we borrowed $250.0 million under the Credit Agreement and used the funds to repay outstanding indebtedness under a prior credit agreement.

On January 24, 2019, we paid an upfront payment of $800.0 million related to our exclusive license agreement with Arena Pharmaceuticals, Inc. (Arena) and funded the payment by borrowing $800.0 million under the Credit Agreement. On September 30, 2019, we paid down $50.0 million on our revolving credit facility under the Credit Agreement. This brought our aggregate outstanding balance under the Credit Agreement to $1.0 billion as of September 30, 2019. Although our credit facility matures in 2024, we classified $250.0 million of the outstanding balance as a current liability on our consolidated balance sheet as we intend to repay this amount within one year.

The Credit Agreement contains customary events of default and customary affirmative and negative covenants. As of September 30, 2019, we were in compliance with these covenants. Lung Biotechnology PBC is our only subsidiary that guarantees our obligations under the Credit Agreement though, from time to time, one or more of our other subsidiaries may be required to guarantee our obligations.

During the three and nine months ended September 30, 2019, we recorded $11.7 million and $34.2 million of interest expense, respectively, related to the Credit Agreement. During the three and nine months ended September 30, 2018, we recorded $4.1 million and $9.6 million of interest expense, respectively, related to a prior credit agreement.