8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cencora, Inc. 8-K Report, Material Agreement (Nov 13, 2015)

Filed November 13, 2015For Securities:COR

Summary

This 8-K filing by AmerisourceBergen Corporation (now Cencora, Inc.) on November 13, 2015, primarily details the execution of a new $1.0 billion senior unsecured term loan and an amendment and restatement of its multi-currency revolving credit facility. The proceeds from the term loan are specifically earmarked to finance a portion of the cash consideration for the recently completed acquisition of PharMEDium Healthcare Holdings, Inc. This indicates a strategic move to manage the financial obligations arising from a significant acquisition. Both the new term loan and the amended revolving credit facility mature on November 13, 2020, and are unsecured. The interest rates for both facilities are variable, dependent on the company's public debt ratings, with a range tied to either an alternate base rate or LIBOR for the term loan, and a broader set of benchmarks for the revolving facility. The filing also outlines repayment schedules, covenants (including a financial leverage ratio), and standard provisions typical of such credit agreements. For investors, this highlights the company's financing strategy for recent M&A activity and its ongoing access to credit facilities, while also pointing to financial covenants that investors should monitor.

Key Highlights

  • 1AmerisourceBergen entered into a new $1.0 billion senior unsecured term loan agreement maturing on November 13, 2020.
  • 2The proceeds from the new term loan will be used to finance a portion of the cash consideration for the acquisition of PharMEDium Healthcare Holdings, Inc.
  • 3The company amended and restated its senior multi-currency revolving credit facility, extending its maturity date to November 13, 2020.
  • 4Both the term loan and the revolving credit facility are unsecured and subject to variable interest rates based on the company's public debt ratings.
  • 5The agreements include financial covenants, such as a financial leverage ratio, and standard provisions regarding indebtedness, liens, and asset sales.
  • 6The company has the right to prepay the term loan and revolving credit facility borrowings without penalty (subject to potential breakage costs).
  • 7The revolving credit facility allows for the issuance of letters of credit up to a maximum of US$50 million.

Frequently Asked Questions

The $1.0 billion term loan is intended to finance a portion of the cash consideration paid for the acquisition of PharMEDium Healthcare Holdings, Inc., which was completed on November 6, 2015.

Both the new $1.0 billion term loan and the amended multi-currency revolving credit facility have a maturity date of November 13, 2020.

Both the term loan and the multi-currency revolving credit facility are unsecured. The company guarantees the obligations of its subsidiaries under the revolving credit facility.

The agreements include affirmative and negative covenants. Notably, a financial leverage ratio is a key covenant, along with limitations on indebtedness of subsidiaries, liens, fundamental changes, and asset sales.