8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cencora, Inc. 8-K Report, Material Agreement (Nov 22, 2016)

Filed November 22, 2016For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on November 21, 2016, detailing significant amendments to its credit facilities. The primary focus is the Sixth Amendment and Restatement to its Multi-Currency Revolving Credit Facility, executed on November 18, 2016. This amendment extends the facility's maturity date to November 18, 2021, and increases the maximum permitted financial leverage ratio from 3.00:1.00 to 3.25:1.00, providing the company with enhanced financial flexibility. The facility is a senior unsecured multi-currency revolving credit line available for general corporate purposes. In addition to the revolving credit facility, Cencora also amended its MWI Term Loan and PharMEDium Term Loan agreements to align covenants and definitions with the updated revolving credit facility. Furthermore, an Eleventh Amendment to the Amended and Restated Receivables Purchase Agreement was executed, extending the facility termination date to November 18, 2019, and standardizing covenants. This securitization facility, with a base limit of $1.45 billion and an option for an additional $250 million, provides ongoing liquidity through the sale of accounts receivables.

Key Highlights

  • 1Extended the maturity date of the Multi-Currency Revolving Credit Facility to November 18, 2021.
  • 2Increased the maximum permitted financial leverage ratio from 3.00:1.00 to 3.25:1.00, offering greater financial flexibility.
  • 3Added Centaur Services Limited as a borrowing subsidiary under the Multi-Currency Revolving Credit Facility.
  • 4Amended MWI Term Loan and PharMEDium Term Loan agreements to synchronize covenants and definitions with the revolving credit facility.
  • 5Extended the termination date of the Receivables Purchase Agreement (securitization facility) to November 18, 2019.
  • 6The securitization facility has a base limit of $1.45 billion, with a potential increase of $250 million for seasonal needs.
  • 7The company can use the revolving credit facility for general corporate purposes and issue letters of credit up to $75 million.

Frequently Asked Questions

The primary purpose of these amendments is to provide Cencora, Inc. (formerly AmerisourceBergen Corporation) with enhanced financial flexibility and operational efficiency. Specifically, the amendments extend the maturity dates of key credit facilities, increase borrowing capacity by adjusting leverage ratios, and align covenants across different financing agreements.

Increasing the maximum permitted financial leverage ratio from 3.00:1.00 to 3.25:1.00 provides Cencora with more room to incur debt relative to its earnings. This can be beneficial for strategic initiatives, potential acquisitions, or managing operational needs without immediately breaching debt covenants.

The amendment to the Receivables Purchase Agreement extends the facility's termination date and standardizes its covenants with the company's other credit facilities. This ensures continued access to liquidity through its receivables securitization program, which is crucial for ongoing business operations and funding needs.

Interest rates on borrowings vary based on the company's public debt ratings and can range from 0 to 110 basis points over specified benchmark rates (like CDOR, LIBOR, or Alternate Base Rate). Annual facility fees, also based on debt ratings, range from 5 to 15 basis points of the total commitments.