Summary
Cardinal Health Inc. (CAH) has filed an 8-K report detailing amendments to its financing agreements. The primary focus is the extension of its $1.0 billion committed receivables sales facility program through September 30, 2022. This extension provides continued access to liquidity and demonstrates ongoing support from its banking partners for this crucial financing mechanism. Additionally, the filing outlines an amendment to a performance guaranty which imposes specific leverage ratio covenants. The company must maintain a Consolidated Net Leverage Ratio of no greater than 4.00-to-1.00 through December 2020, stepping down to 3.75-to-1.00 starting March 2021. These covenants are important for investors to monitor as they represent financial constraints that could impact future strategic decisions or capital allocation.
Key Highlights
- 1Extension of $1.0 billion receivables sales facility program until September 30, 2022.
- 2The receivables facility provides ongoing access to committed liquidity for the company.
- 3New Consolidated Net Leverage Ratio covenant introduced, requiring a ratio of no greater than 4.00-to-1.00 through December 2020.
- 4The maximum permitted Consolidated Net Leverage Ratio will decrease to 3.75-to-1.00 starting in March 2021.
- 5The amendments involve key financial institutions, including Wells Fargo Bank, N.A. and MUFG Bank, Ltd.
- 6The filing indicates routine financial advisory and banking services provided by these institutions.