Summary
Cardinal Health, Inc. (CAH) filed an 8-K on March 1, 2023, detailing a significant update to its financing structure. The company entered into a Third Amended and Restated Five-Year Credit Agreement, which provides access to a $2.0 billion revolving credit facility and extends its term to February 25, 2028. This refinancing enhances the company's financial flexibility and liquidity. The agreement includes customary covenants, with a key financial covenant requiring a Consolidated Net Leverage Ratio of no greater than 3.75 to 1.00. Notably, the new credit agreement incorporates provisions for Environmental, Social, and Governance (ESG) targets, allowing for potential adjustments to facility fees and margins based on performance. This demonstrates Cardinal Health's commitment to integrating ESG considerations into its financing. The facility backs the company's commercial paper program and is available for general corporate purposes, underscoring its importance for ongoing operational needs.
Key Highlights
- 1Cardinal Health entered into a new Five-Year Credit Agreement on February 27, 2023.
- 2The agreement provides access to a $2.0 billion revolving credit facility.
- 3The maturity date for the revolving credit facility has been extended to February 25, 2028, with options for further one-year extensions.
- 4A key financial covenant requires a Consolidated Net Leverage Ratio not to exceed 3.75 to 1.00.
- 5The credit agreement includes provisions for incorporating ESG targets, potentially impacting facility fees and margins.
- 6The revolving credit facility supports the company's commercial paper program and general corporate purposes.