CDW Corp Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on November 24, 2014, with the earliest event reported on that date. The filing details a significant capital structure transaction involving the issuance of new senior notes and the concurrent redemption of existing debt.
Key Financial Metrics and Debt Activity
- New Debt Issuance: CDW LLC and CDW Finance Corporation issued $575,000,000 aggregate principal amount of 5.50% Senior Notes due 2024.
- Issuance Terms: Notes were sold at 100% of principal. Interest is payable semi-annually on June 1 and December 1, with the first payment due June 1, 2015.
- Debt Redemption: The company called for the redemption of $541.4 million of its outstanding 8.5% Senior Notes due 2019.
- Redemption Cost: The redemption price is 106.202% of the principal amount, plus accrued interest, with a redemption date of December 31, 2014.
- Financial Statements: This filing does not provide revenue, profit, cash flow, or margin data. It includes an exhibit for the Ratio of Earnings to Fixed Charges but does not state the specific ratio value in the text.
Material Changes Versus Prior Period
The primary material change is the refinancing of high-interest debt. The company is replacing a portion of its 8.5% Senior Notes due 2019 with new 5.50% Senior Notes due 2024. This action is expected to reduce the company's weighted average cost of debt and extend the maturity profile of its debt obligations.
Guidance, Outlook, and Covenants
The filing does not contain forward-looking guidance, revenue outlook, or management commentary regarding operational performance. However, it outlines significant covenants associated with the new Indenture:
- Restrictions: The Indenture restricts the ability to incur additional non-guarantor indebtedness, issue non-guarantor preferred stock, create liens on certain assets, and enter into sale and lease-back transactions.
- Change of Control: In the event of a change of control, note holders may require the company to repurchase the notes at 101% of the principal amount plus accrued interest.
- Redemption Rights: The company may redeem the new notes prior to June 1, 2024, at a "make whole" premium. After June 1, 2024, they may be redeemed at 100% of principal.
Key Facts for Investor Verification
- Verify the total cash outflow required for the December 31, 2014, redemption of the 8.5% notes, including the 6.202% premium and accrued interest.
- Confirm the net impact on the company's liquidity and cash reserves following the $575 million issuance and the subsequent redemption payment.
- Review the "Ratio of Earnings to Fixed Charges" in Exhibit 12.1 to assess compliance with the new debt covenants.
- Monitor the company's ability to meet the semi-annual interest payments on the new 5.50% notes starting June 1, 2015.