Summary
Cardinal Health, Inc. (CAH) announced on June 27, 2019, the execution of a Second Amended and Restated Five-Year Credit Agreement. This significant refinancing provides the company with continued access to a $2.0 billion revolving credit facility, extending its maturity date to June 27, 2024. This facility is crucial as it supports Cardinal Health's commercial paper program and is available for general corporate purposes, offering financial flexibility. Key terms of the agreement include the establishment of a Consolidated Net Leverage Ratio covenant. Initially, the maximum permitted ratio is 4.25-to-1.00 as of June 30, 2019, with a progressive reduction to 4.00-to-1.00 by September 2019 and further to 3.75-to-1.00 by March 2021. This demonstrates a commitment by Cardinal Health to manage its debt levels and maintain a strong financial position, which is a positive signal to investors regarding financial stewardship.
Key Highlights
- 1Cardinal Health entered into a Second Amended and Restated Five-Year Credit Agreement on June 27, 2019.
- 2The agreement provides access to a $2.0 billion revolving credit facility.
- 3The maturity date of the revolving credit facility has been extended to June 27, 2024.
- 4The credit facility supports the company's existing commercial paper program and general corporate purposes.
- 5A Consolidated Net Leverage Ratio covenant is in place, initially set at a maximum of 4.25-to-1.00 as of June 30, 2019.
- 6The maximum permitted leverage ratio will decrease to 4.00-to-1.00 in September 2019 and 3.75-to-1.00 in March 2021.
- 7Multiple major financial institutions, including JPMorgan Chase Bank, Bank of America, and MUFG Bank, are parties to the agreement.