CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on February 3, 2012, covering events that occurred on February 2, 2012. The filing details significant capital structure transactions involving the issuance of new debt and a tender offer for existing senior notes.
Key Financial Metrics and Transactions
- New Debt Issuance: CDW LLC and CDW Finance Corporation agreed to sell $130,000,000 aggregate principal amount of 8.5% senior notes due 2019.
- Pricing: The new notes were priced at 104.375% of par value in a private offering exempt from registration under the Securities Act of 1933.
- Closing Date: The sale of the new notes is expected to close on February 17, 2012, subject to customary conditions.
- Existing Debt Targeted: The company initiated a cash tender offer to purchase up to $49,321,000 of 11.00% Senior Exchange Notes due 2015 and $79,672,076 of 11.50% / 12.25% Senior PIK Election Exchange Notes due 2015.
Material Changes and Strategic Actions
The primary material change is the refinancing of higher-cost debt. The company is replacing outstanding senior notes carrying interest rates of 11.00% and 11.50% (or 12.25%) with new notes at a lower rate of 8.5%. Additionally, the company is soliciting consents from holders of the existing Senior Notes to amend the indenture, which would eliminate substantially all restrictive covenants and certain events of default.
Outlook, Risks, and Contingencies
The filing indicates a strategic move to reduce interest expense and increase financial flexibility by removing restrictive covenants. The tender offer and consent solicitation are contingent upon the successful closing of the new note issuance. The filing explicitly states that the new notes are not registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption.
Key Facts for Investor Verification
- Verify the final closing of the $130 million 8.5% senior notes on or around February 17, 2012.
- Monitor the acceptance rate of the tender offer for the 11.00% and 11.50%/12.25% Senior Notes due 2015.
- Confirm the successful execution of the consent solicitation to remove restrictive covenants from the existing Senior Notes indenture.
- Review the attached press releases (Exhibits 99.1 and 99.2) for specific terms of the tender offer and pricing details.