8-KMaterial Agreements

CARDINAL HEALTH INC 8-K Report, Material Agreement (Oct 6, 2004)

Filed October 6, 2004For Securities:CAH

Summary

This Form 8-K filing by Cardinal Health, Inc. (CAH) reports a significant amendment to its receivables purchase facility, enhancing its financial flexibility. On September 30, 2004, Cardinal Health Funding, LLC, a wholly-owned subsidiary, amended its existing agreement to increase the facility's maximum aggregate principal amount from $500 million to $800 million. This expansion allows for greater access to capital through the sale of trade receivables from its Pharmaceutical Distribution business. The amendment represents a strategic move to bolster the company's liquidity and support its ongoing operations and growth initiatives. The extended facility involves several financial institutions and a structured process where receivables are sold to a servicer subsidiary and then to the funding subsidiary, which then transfers interests to conduits in exchange for cash. Cardinal Health, Inc. has also provided a performance guaranty, underscoring its commitment to the facility's obligations.

Key Highlights

  • 1Cardinal Health's subsidiary, Cardinal Health Funding, LLC, entered into an amendment to its receivables purchase agreement.
  • 2The amendment increases the maximum receivables purchase facility amount from $500 million to $800 million.
  • 3This expansion provides enhanced liquidity and financial flexibility for the company.
  • 4The facility involves the sale of existing and future trade receivables from the Pharmaceutical Distribution business.
  • 5Cardinal Health, Inc. has issued an Amended and Restated Performance Guaranty to support the obligations under the facility.
  • 6The agreement involves multiple financial institutions, including The Bank of Nova Scotia and Bank One, NA.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce a material amendment to Cardinal Health's existing receivables purchase agreement, which significantly increases the available financing capacity.

The amendment increases the company's maximum receivables purchase facility from $500 million to $800 million, providing substantially more liquidity. This enhanced access to capital can support operations, investments, and growth strategies.

The key terms include the increase in the facility size to $800 million, the ongoing sale of trade receivables from the Pharmaceutical Distribution business, and Cardinal Health, Inc.'s performance guaranty for the obligations of its subsidiaries involved in the facility.

Key financial parties include Cardinal Health Funding, LLC (as seller), Griffin Capital, LLC (as servicer), PREFCO, Falcon Asset Securitization Corporation, and Liberty Street Funding Corp. (as conduits), along with The Bank of Nova Scotia and Bank One, NA (as managing agent and agent, respectively).