CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on August 17, 2016. The filing discloses the entry into a material definitive agreement regarding the company's senior secured term loan facility.
Key Financial Metrics and Debt Structure
The filing details the amendment and restatement of CDW's senior secured term loan facility with the following terms:
- Facility Size: $1,490.425 million.
- Interest Rate: Alternate base rate plus 1.25% or LIBOR plus 2.25% (with a LIBOR floor of 0.75% per annum).
- Maturity Date: Extended from 2020 to 2023.
- Amortization: Quarterly payments equal to 0.25% of the principal amount.
- Incremental Capacity: Maximum new incremental term loan commitments increased from $500 million to $1,000 million, plus an additional amount subject to a senior secured leverage ratio governor.
The filing text does not provide current revenue, profit, cash flow, or liquidity metrics, as this report focuses solely on the debt agreement.
Material Changes Versus Prior Period
Compared to the original Term Loan Agreement dated April 29, 2013, the material changes include:
- Extension of the loan maturity by three years (to 2023).
- Establishment of specific interest rate spreads (1.25% over base rate; 2.25% over LIBOR).
- Doubling of the available incremental term loan commitment capacity from $500 million to $1 billion.
- Implementation of a 0.25% quarterly amortization schedule.
Guidance, Outlook, and Risks
The filing does not contain management commentary on future business outlook, revenue guidance, or specific risk factors beyond the terms of the debt agreement. The agreement is subject to a senior secured leverage ratio governor for additional incremental borrowing. The full terms are qualified by reference to the Amended and Restated Term Loan Agreement filed as Exhibit 10.1.
Key Facts for Investor Verification
- Verify the exact interest rate calculations based on current LIBOR and alternate base rates.
- Confirm the impact of the extended 2023 maturity date on the company's long-term debt schedule.
- Review the specific "senior secured leverage ratio governor" terms in Exhibit 10.1 to understand limits on additional borrowing.
- Assess the cash flow implications of the new 0.25% quarterly amortization requirement.