CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on April 16, 2020, with the earliest event reported on April 21, 2020. The filing details the completion of a registered offering of senior notes by CDW LLC and CDW Finance Corporation (the "Co-Issuers").
Key Financial Metrics and Debt Structure
- Debt Issuance: $600,000,000 aggregate principal amount of 4.125% Senior Notes due 2025.
- Issue Price: 100% of the principal amount.
- Interest Rate: 4.125% per annum, payable semi-annually on May 1 and November 1.
- Maturity Date: May 1, 2025.
- First Interest Payment: November 1, 2020 (accruing from April 21, 2020).
- Revenue/Profit/Cash Flow: The filing text does not provide a clear value for revenue, profit, cash flow, or operating margins as this is a transaction-specific report.
Material Changes and Covenants
The primary material change is the incurrence of new long-term debt. The Indenture governing the Notes includes covenants that restrict the Co-Issuers and Guarantors from:
- Incurring or guaranteeing additional non-guarantor indebtedness or issuing non-guarantor preferred stock.
- Creating liens on certain assets to secure debt.
- Entering into sale and lease-back transactions.
- Consolidating, merging, or disposing of substantially all assets without compliance.
Redemption, Repurchase, and Risks
- Redemption Prior to May 1, 2022: Co-Issuers may redeem at 100% of principal plus accrued interest and a "make whole" premium. Alternatively, up to 40% of the principal may be redeemed using net proceeds from equity offerings at 104.125% of principal plus accrued interest.
- Redemption On or After May 1, 2022: Co-Issuers may redeem at 100% of principal plus accrued interest and a declining premium.
- Change of Control: If a change of control event occurs, Note holders may require repurchase at 101% of principal plus accrued interest.
- Events of Default: Include failure to pay principal or interest, failure to comply with covenants, and bankruptcy/insolvency events, which may trigger immediate acceleration of all outstanding Notes.
Investor Verification Checklist
- Verify the use of proceeds from the $600 million offering in subsequent financial statements.
- Review the full text of the Supplemental Indenture (Exhibit 4.2) for specific limitations on future debt capacity.
- Monitor the company's ability to meet semi-annual interest payments starting November 1, 2020.
- Assess the impact of the new debt on the company's leverage ratios and liquidity position.