8-KOther Events

CHURCH & DWIGHT CO INC /DE/ 8-K Report (Jan 30, 2003)

Filed January 30, 2003For Securities:CHD

Summary

Church & Dwight Co., Inc. (CHD) announced on January 30, 2003, that it is refinancing a portion of its primary credit facility through a special purpose finance subsidiary, Harrison Street Funding, LLC. This transaction involves the sale of accounts receivable to Harrison Street Funding, which then sells undivided interests in these receivables to Market Street Funding Corporation, a conduit formed by PNC Bank. The primary goals of this arrangement are to reduce expenses associated with the existing credit facility and lower overall financing costs by accessing the commercial paper market. The company's accounts receivable will be sold to the subsidiary over a three-year term. These transactions will be accounted for as borrowings on the consolidated financial statements, meaning the receivables will be included in the company's consolidated assets. Importantly, these receivables will not be available to satisfy claims from creditors other than Market Street, providing a degree of asset protection for other creditors.

Key Highlights

  • 1Church & Dwight (CHD) is refinancing $60 million of its credit facility.
  • 2A new financing structure involves a special purpose subsidiary, Harrison Street Funding, LLC.
  • 3The company is selling accounts receivable to its subsidiary, which then sells interests to PNC Bank's conduit, Market Street Funding Corporation.
  • 4The primary objectives are to reduce credit facility expenses and lower financing costs.
  • 5The company aims to access the commercial paper market for more favorable financing.
  • 6These transactions will be recorded as borrowings on the consolidated financial statements.
  • 7Specific receivables transferred will not be available to general creditors of Church & Dwight.

Frequently Asked Questions

The company is refinancing a portion of its primary credit facility amounting to $60,000,000.

These transactions will be reflected as borrowings on the consolidated financial statements. The accounts receivable sold to Harrison Street Funding will be included in the consolidated assets of Church & Dwight.

While described as 'borrowings' and involving the sale of receivables, the primary intent is to lower financing costs and access the commercial paper market, effectively acting as a form of secured financing where the receivables collateralize the arrangement.

Legally, Church & Dwight sells its accounts receivable to Harrison Street Funding, LLC. However, for accounting purposes, these receivables are consolidated onto Church & Dwight's balance sheet as part of the borrowing structure.