CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on December 6, 2010, reporting events occurring on December 2 and December 3, 2010. The filing details a significant capital restructuring involving the issuance of new debt and the amendment of existing credit facilities.
Key Financial Metrics and Transactions
- New Debt Issuance: Entered into a purchase agreement for $450 million aggregate principal amount of 8% senior secured notes due 2018, with an over-allotment option for an additional $50 million.
- Term Loan Amendment: Amended existing term loans totaling $1.162 billion (assuming no over-allotment exercise).
- Interest Rate Impact: The amendment increases the interest rate on the extended-maturity term loans by 100 basis points.
- Use of Proceeds: All proceeds from the new note offering will be used to repay indebtedness outstanding under the senior secured term loan at par.
Material Changes Versus Prior Period
The filing does not provide comparative financial performance metrics (revenue, profit, cash flow) as it is a current report on specific corporate events rather than a periodic financial statement. The material change is the restructuring of the company's debt profile:
- Maturity Extension: The maturity of the $1.162 billion term loan portfolio is extended from October 10, 2014, to July 15, 2017.
- Debt Capacity: The amendment permits the issuance of additional senior secured indebtedness on a pari passu basis with the term loans in the future, subject to incurrence tests.
Outlook, Risks, and Contingencies
Closing Conditions: The sale of the notes and the effectiveness of the Term Loan Amendment are expected to close on December 17, 2010, subject to certain closing conditions.
Regulatory Status: The securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States except pursuant to an exemption from registration requirements.
Management Commentary: The filing indicates a strategic move to refinance existing debt obligations with longer-term instruments, albeit at a higher interest rate for the remaining term loan balance.
Key Facts for Investor Verification
- Verify the final closing date of the $450 million note offering and whether the $50 million over-allotment option was exercised.
- Confirm the exact interest rate applied to the remaining term loan balance following the 100 basis point increase.
- Review the specific "incurrence tests" required for future issuance of additional senior secured indebtedness as detailed in the full amendment text (Exhibit 10.1).
- Monitor the company's liquidity position post-closing to ensure the refinancing successfully extended the debt maturity profile as intended.