CDW Corporation Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by CDW Corporation on March 10, 2011, covering events that occurred on March 7, 2011. The filing addresses a material definitive agreement regarding the company's outstanding senior notes held by its wholly owned subsidiaries, CDW LLC and CDW Finance Corporation.
Key Financial Metrics and Debt Structure
The filing details a debt restructuring involving two classes of Senior Notes due in 2015:
- Senior Cash Pay Notes: 11.00% interest rate with an aggregate principal amount of $890,000,000.
- Senior PIK Election Notes: 11.50% / 12.25% interest rate with an aggregate principal amount of $316,974,000.
- Total Senior Notes: Approximately $1.207 billion aggregate principal amount.
As of 5:00 p.m. on March 7, 2011, holders had tendered approximately 80.93% of the total Senior Notes:
- Tendered Cash Pay Notes: $759,207,000.
- Tendered PIK Election Notes: $217,569,859.
The filing does not provide data on revenue, profit, cash flow, operating margins, or general liquidity metrics.
Material Changes and Agreements
CDW Corporation announced the receipt of requisite consents to amend the indenture governing the Senior Notes. The key changes include:
- Elimination of substantially all restrictive covenants contained in the original Indenture.
- Removal of certain events of default.
- Execution of a Third Senior Exchange Note Supplemental Indenture with U.S. Bank National Association as trustee.
The amendments are effective upon execution but will not become operative until the Issuers accept the tendered notes pursuant to the Offer to Purchase.
Outlook, Risks, and Management Commentary
Management accelerated the expiration time of the tender offer following the receipt of requisite consents. The primary risk addressed by this filing is the reduction of financial flexibility due to restrictive covenants, which has been mitigated by the successful amendment. No specific forward-looking guidance on revenue or earnings is provided in this document.
Key Facts for Investor Verification
- Verify the final acceptance rate of the tender offer to confirm if the 80.93% threshold remains sufficient for the amendments to become fully operative.
- Review the attached Supplemental Indenture (Exhibit 4.1) to understand the specific covenants that were eliminated and any new terms introduced.
- Confirm the timeline for the exchange of the tendered notes and the issuance of new securities or cash settlement.
- Assess the impact of removing restrictive covenants on the company's ability to incur additional debt or engage in other corporate actions.