Business Context and Reporting Period
Company: ARROW ELECTRONICS, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: January 27, 2020
Event: Entry into a material definitive agreement involving a multi-jurisdictional asset-backed securitization.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, or existing debt levels. The primary financial metric disclosed is the creation of new liquidity:
- New Liquidity: Up to €400 million.
- Instrument: Asset-backed securitization of trade receivables.
- Term: Initial three-year period, extendable by agreement.
Material Changes
The Company established a new financing structure on January 27, 2020, involving subsidiaries in the UK and Germany. Key changes include:
- Receivables Sale: Arrow Electronics (UK) Limited and Arrow Central Europe GmbH sold, and will continue to sell, trade receivables to a bankruptcy-remote special purpose vehicle (Arrow EMEA Funding Corp B.V.).
- Liquidity Enhancement: The transaction provides immediate access to up to €400 million in additional available liquidity.
Outlook, Risks, and Management Commentary
Management Commentary: The Company entered into English and German law governed receivables sale agreements to facilitate the securitization. The arrangement includes customary representations, warranties, and covenants.
Risks and Contingencies: The filing notes that the description of the agreements is qualified by reference to the full text of the Sale Agreements filed as Exhibits 10.1 and 10.2. No specific risks or unusual items beyond the standard terms of the securitization are detailed in the summary text.
Investor Verification Checklist
- Verify the full terms of the English and German Receivables Sale Agreements (Exhibits 10.1 and 10.2) for specific covenants and recourse provisions.
- Confirm the impact of the €400 million liquidity facility on the Company's overall debt-to-equity ratio and interest expense.
- Review the eligibility criteria for the trade receivables being sold to the special purpose vehicle.
- Assess the extension terms for the three-year initial period of the securitization.