8-KMaterial AgreementsExhibits & Filings

Cencora, Inc. 8-K Report, Material Agreement (Nov 4, 2015)

Filed November 4, 2015For Securities:COR

Summary

This 8-K filing by AmerisourceBergen Corporation (now Cencora, Inc.) on November 4, 2015, details a material definitive agreement concerning its securitization facility. The company entered into an Omnibus Amendment that significantly extends the facility's termination date and broadens its scope. Key changes include extending the scheduled termination date of the securitization facility from December 5, 2017, to November 2, 2018, and allowing receivables from Bellco Drug Corp. to be included after its assets and liabilities are transferred to AmerisourceBergen Drug Corporation (ABDC). This amendment is crucial for maintaining AmerisourceBergen's liquidity and funding for ongoing business operations, as the facility is based on its accounts receivable from pharmaceutical sales.

Key Highlights

  • 1AmerisourceBergen Corporation entered into an Omnibus Amendment to its securitization facility agreements.
  • 2The amendment extends the facility's termination date by approximately one year, from December 5, 2017, to November 2, 2018.
  • 3The facility's scope is expanded to include accounts receivable from Bellco Drug Corp. following its integration with ABDC.
  • 4The securitization facility's base limit remains at $950 million, with an option for a $250 million increase for seasonal needs.
  • 5This amendment enhances the company's liquidity and funding capabilities for its core business operations.
  • 6The facility relies on accounts receivable generated by ABDC from pharmaceutical sales.
  • 7The Bank of Tokyo-Mitsubishi UFJ, Ltd. continues to serve as the administrator for the facility.

Frequently Asked Questions

The main purpose of the Omnibus Amendment is to modify and extend the company's existing securitization facility. This provides continued access to liquidity and funding for ongoing business needs by extending the agreement's term and slightly broadening the types of receivables that can be included.

The amendment extends the termination date of the facility to November 2, 2018. The base limit of the facility remains $950 million, with an option to increase it by an additional $250 million for seasonal demands, subject to bank approval. The primary impact is on the duration and scope, ensuring continued access to this funding source.

A securitization facility is a type of financing where a company sells its accounts receivable to a special entity (ARFC in this case) which then sells interests in those receivables to investors (purchasers). This allows the company to obtain immediate cash and improve its liquidity. For AmerisourceBergen, this facility is a key source of funding for its ongoing business operations, particularly related to the sale of pharmaceuticals.

Including receivables from Bellco Drug Corp. after its assets and liabilities are transferred to ABDC means that the pool of assets available to back the securitization facility will expand. This integration potentially strengthens the facility by diversifying the receivables or simply incorporating them into the existing structure for ongoing financing.