ARW

Business Context and Reporting Period

Company: Arrow Electronics, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: September 9, 2021
Event: Entry into a Material Definitive Agreement (Fourth Amended and Restated Credit Agreement).

Key Financial Metrics and Debt Structure

This filing details a refinancing of the company's credit facility rather than reporting operational financial results (revenue, profit, or cash flow).

• Total Credit Facility: Up to $2,000,000,000 (consisting of revolving credit facilities and letters of credit).
• Maturity Date: Extended to September 9, 2026.
• Interest Rate Margins:
  • Eurocurrency loans: 0.900% to 1.600%.
  • Base rate loans: 0.000% to 0.600%.
• Currencies: U.S. Dollars, British Pounds Sterling, Euros, and other specified currencies.
• Administrative Agent: JPMorgan Chase Bank, N.A.

Material Changes Versus Prior Period

The new agreement amends the Previous Credit Agreement dated December 14, 2018. Key modifications include:

• Maturity Extension: Extended to September 9, 2026.
• Covenant Changes: Deletion of the financial covenant relating to the minimum interest coverage ratio.
• Threshold Adjustments: Increases in thresholds for certain representations and covenants to reflect asset growth.
• Structural Updates: Addition of LIBOR replacement language and provision of a zero floor for interest rate indexes.
• Pricing: Changes in pricing structure based on senior unsecured debt ratings.

Outlook, Risks, and Covenants

Covenants and Restrictions:

• Requirement to comply with a consolidated leverage ratio test.
• Restrictions on incurring liens, mergers, consolidations, and certain acquisitions.
• Restrictions on subsidiaries incurring indebtedness.

Events of Default:

• Failure to pay principal or interest.
• Material breach of representations or warranties.
• Bankruptcy or insolvency events.
• Change in control regarding the board of directors or share ownership.
• Cross-defaults to other indebtedness.

Management Commentary: The filing states that terms are substantially similar to the previous agreement aside from the specific amendments listed above. No specific forward-looking guidance on revenue or earnings is provided in this document.

Investor Verification Checklist

• Verify the full text of the Fourth Amended and Restated Credit Agreement (Exhibit 10.1) for complete covenant details.
• Confirm the company's current senior unsecured debt ratings to determine the applicable interest rate margin.
• Review the consolidated leverage ratio test requirements to assess compliance obligations.
• Monitor the transition from LIBOR to alternative reference rates as per the new replacement language.
• Check subsequent filings for any drawdowns on the $2 billion facility or changes in the leverage ratio.