CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on March 31, 2017. The filing reports the entry into a material definitive agreement regarding the company's senior secured asset-based revolving credit facility.
Key Financial Metrics and Debt Structure
The filing details amendments to CDW's revolving credit facility with the following specific metrics:
- Facility Size: Increased from $1,250.0 million to $1,450.0 million.
- Maturity Date: Extended from June 6, 2019, to March 31, 2022.
- Interest Rate: Variable rate based on LIBOR or an alternate base rate plus an applicable margin tied to average daily excess cash availability.
- Pricing Grid: The ratings-based adjustment has been eliminated, allowing for reduced interest rate margins previously available only if specific ratings requirements were met.
- Liquidity Conditions: Borrowing is subject to a minimum liquidity condition. If excess cash availability falls below the lesser of $125.0 million or the greater of 10% of the borrowing base and $100.0 million, additional lending is contingent on a consolidated fixed charge coverage ratio of at least 1.00 to 1.00.
The filing text does not provide clear values for revenue, profit, cash flow, operating margins, or total debt outstanding as of the reporting date.
Material Changes Versus Prior Period
The primary material change is the restructuring of the existing credit agreement dated June 6, 2014. Key changes include:
- Expansion of total available credit by $200.0 million.
- Extension of the facility term by approximately three years.
- Removal of credit rating triggers for favorable pricing, simplifying the cost of borrowing.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future performance, or specific risk factors beyond the standard covenants of the credit agreement. The primary contingency noted is the minimum liquidity condition which restricts borrowing availability if specific cash and coverage ratios are not met.
Key Facts for Investor Verification
- Verify the current utilization rate of the new $1,450.0 million facility.
- Confirm the company's current consolidated fixed charge coverage ratio to assess borrowing flexibility under the liquidity condition.
- Review the full text of the Second Amended and Restated Revolving Loan Credit Agreement (Exhibit 10.1) for detailed covenant definitions.
- Monitor future filings for any drawdowns on the increased credit capacity.