Summary
This 8-K filing from Cardinal Health, Inc. (CAH) on November 26, 2007, details a material amendment to its existing receivables purchase agreement. Specifically, on November 19, 2007, Cardinal Health Funding, LLC, a wholly-owned subsidiary, entered into a third amendment and restatement of its receivables purchase agreement with Griffin Capital, LLC, and various financial institutions. This amendment extends the $800 million revolving receivables purchase facility for an additional 364 days and increases its capacity to $850 million. This transaction signifies continued access to crucial short-term financing through the sale of trade receivables. The increase in the facility amount suggests the company's ongoing need for liquidity to support its operations. Investors should note the parties involved, the expanded capacity, and the extended maturity of this financing arrangement, which is a key component of Cardinal Health's working capital management.
Key Highlights
- 1Cardinal Health Funding, LLC amended and restated its receivables purchase agreement, extending the facility for 364 days.
- 2The revolving receivables purchase facility was increased from $800 million to $850 million.
- 3The agreement involves Cardinal Health's wholly-owned subsidiary and multiple financial institutions, including Wachovia Bank, The Bank of Tokyo-Mitsubishi UFJ, and ABN AMRO Bank.
- 4This amendment ensures continued access to a significant source of short-term financing through the sale of trade receivables.
- 5The structure involves the sale of existing and future trade receivables from Cardinal Health 411, Inc. and Cardinal Health 110, Inc. to subsidiaries for cash.
- 6Customary amortization events are included, such as payment defaults, misrepresentations, cross-defaults, breaches of covenants, and changes of control.