Summary
Cencora, Inc. (formerly AmerisourceBergen Corporation) has filed an 8-K report detailing the execution of a new $700 million senior unsecured multi-currency revolving credit facility, effective March 18, 2011. This facility matures on March 18, 2015, and allows borrowings in various currencies including USD, CAD, Sterling, and Euros, with options for base rate or LIBOR-based interest. This move appears to be a strategic refinancing, as the company also terminated its previous $750 million credit facility dated November 14, 2006, which was set to expire in November 2011. The new credit agreement includes provisions for letters of credit up to $150 million and covenants such as a leverage ratio not to exceed 3.00 to 1.00. The company can utilize these funds for general corporate purposes, investments, and acquisitions. The termination of the older, more favorably priced facility is notable, suggesting potential shifts in market conditions or the company's financing strategy, though the new facility provides significant financial flexibility.
Key Highlights
- 1Entry into a new $700 million senior unsecured multi-currency revolving credit facility maturing March 18, 2015.
- 2Ability to borrow in multiple currencies including USD, Canadian Dollars, Sterling, and Euros.
- 3Interest rates are variable, based on a specified margin over base rate, LIBOR, EURIBOR, or Canadian prime rate, with rates contingent on the company's debt ratings.
- 4Includes a sub-facility for letters of credit up to $150 million.
- 5Key covenant requires compliance with a leverage ratio not to exceed 3.00 to 1.00.
- 6Funds can be used for general corporate purposes, permitted investments, and permitted acquisitions.
- 7Termination of a prior $750 million credit facility dated November 14, 2006.