Business Context and Reporting Period
This Form 8-K Current Report was filed by Avnet, Inc. on August 17, 2018, regarding events occurring on August 16, 2018. The filing details the entry into a material definitive agreement to amend and restructure the Company's existing receivables financing program.
Key Financial Metrics and Agreements
- Agreement Type: Fourth Amended and Restated Receivables Purchase Agreement and Second Amended and Restated Receivables Sale Agreement.
- Facility Capacity: Up to $500 million in eligible receivables available for sale on a revolving basis.
- Outstanding Balance: As of August 16, 2018, no amounts were outstanding under the new agreement.
- Interest Rate: Borrowings bear interest at one-month LIBOR plus an applicable margin or a base rate.
- Expiration Date: August 19, 2020, unless terminated earlier.
- Agent: Wells Fargo Bank, N.A. (replacing JPMorgan Chase Bank, N.A. as the agent).
Material Changes Versus Prior Period
The new agreements amend and supersede the Third Amended and Restated Receivable Purchase Agreement and the Amended and Restated Receivables Sale Agreement, both dated February 27, 2017. The primary structural change involves the replacement of the administrative agent from JPMorgan Chase Bank, N.A. to Wells Fargo Bank, N.A., and the extension of the program's maturity date.
Outlook, Risks, and Management Commentary
The filing notes that the Securitization Program may be terminated earlier under certain circumstances, including an amortization event. The document includes standard disclaimers stating that the representations and warranties in the agreements were made solely for the benefit of the contracting parties and should not be relied upon by investors as characterizations of the actual state of facts. The filing does not provide specific forward-looking financial guidance or commentary on future revenue or profit margins.
Key Facts for Investor Verification
- Verify the specific "applicable margin" added to LIBOR or base rate in the full text of the agreement (Exhibit 10.1).
- Confirm the definition of "eligible receivables" and any covenants related to the quality of the receivables pool.
- Review the conditions triggering an "amortization event" that could force early termination of the $500 million facility.
- Check subsequent filings to determine if the Company has drawn down on this facility since August 16, 2018.