Summary
Cardinal Health Inc. (CAH) announced a significant amendment and restatement to its receivables purchase agreement on September 1, 2023. This strategic move involves adding a new subsidiary, Cardinal Health 23 Funding, LLC (CH-23 Funding), as an additional seller of receivables under its $1.0 billion committed receivables sales facility. Furthermore, the company has appointed another subsidiary, Cardinal Health 23, LLC (CH-23), as the new servicer for this facility, replacing Griffin Capital. These changes are expected to enhance the efficiency and structure of Cardinal Health's receivables financing operations. In conjunction with this amendment, the Company has also entered into a Performance Guaranty to back the obligations of its affiliated originators and CH-23 as the servicer. This guaranty includes compliance with certain financial covenants, indicating a commitment to the new servicing arrangement and the overall financial health of the program. Investors should view this as a procedural update aimed at optimizing the company's financing capabilities.
Key Highlights
- 1Amendment and Restatement of the $1.0 billion Receivables Purchase Agreement, effective September 1, 2023.
- 2Addition of Cardinal Health 23 Funding, LLC (CH-23 Funding) as an additional seller of receivables.
- 3Appointment of Cardinal Health 23, LLC (CH-23) as the new servicer, replacing Griffin Capital.
- 4Introduction of a Performance Guaranty by Cardinal Health, Inc. to support CH-23 Funding and CH-23.
- 5The Performance Guaranty includes specific financial covenants that Cardinal Health must adhere to.
- 6This action aims to streamline and potentially improve the company's receivables financing structure.