8-KMaterial AgreementsFinancial EventsExhibits & Filings

Cencora, Inc. 8-K Report, Material Agreement (Sep 23, 2019)

Filed September 23, 2019For Securities:COR

Summary

Cencora, Inc. (formerly AmerisourceBergen Corporation) filed an 8-K on September 23, 2019, detailing significant amendments to its credit facilities. The primary focus is the Eighth Amendment and Restatement of its Multi-Currency Revolving Credit Facility, which extends the maturity date to September 18, 2024, increases the borrowing capacity to $1.4 billion, and adjusts financial leverage covenants to a maximum of 3.50:1.00. These changes provide the company with enhanced financial flexibility and a longer-term borrowing runway. Additionally, the company amended its Term Credit Agreement to align with the changes in the revolving credit facility, though its maturity date remains October 31, 2020. The company also extended its Receivables Purchase Agreement, the facility termination date to September 16, 2022, which provides ongoing liquidity for its business needs through the sale of accounts receivables. These updates collectively signal proactive debt management and a strategic approach to capital structure optimization.

Key Highlights

  • 1Extended the maturity date of the $1.4 billion Multi-Currency Revolving Credit Facility to September 18, 2024.
  • 2Increased the maximum permitted financial leverage ratio from 3.25:1.00 to 3.50:1.00, allowing for greater debt capacity.
  • 3Modified restrictive covenants, including a $900 million carve-out for intercompany debt and elimination of certain covenants related to affiliates and fiscal quarters.
  • 4The Term Credit Agreement was amended to conform with the revolving credit facility changes, maintaining its maturity at October 31, 2020.
  • 5Extended the Receivables Purchase Agreement's facility termination date to September 16, 2022, securing liquidity via receivables securitization.
  • 6Added The Toronto-Dominion Bank as a committed purchaser and purchaser agent to the securitization facility.
  • 7The company can use funds from the Multi-Currency Revolving Credit Facility for general corporate purposes.

Frequently Asked Questions

The company amended and restated its Multi-Currency Revolving Credit Facility, extending its maturity to September 18, 2024. The facility size remains $1.4 billion, but the maximum financial leverage ratio was increased to 3.50:1.00, and certain restrictive covenants were modified or eliminated to provide more flexibility.

The increase in the maximum permitted financial leverage ratio from 3.25:1.00 to 3.50:1.00, along with the $900 million carve-out for intercompany debt, indicates that the company has increased flexibility to manage its debt levels and pursue strategic initiatives.

The amendment to the Receivables Purchase Agreement extends the facility's termination date to September 16, 2022, ensuring continued access to liquidity through the sale of accounts receivables. This facility is crucial for funding the company's ongoing business needs.

The interest rates and facility fees for the Multi-Currency Revolving Credit Facility are based on the company's public debt ratings and fluctuate based on market benchmarks. Specific rates range from 0 to 12.5 basis points over alternate base rates and 70 to 112.5 basis points over other benchmarks like LIBOR, while facility fees range from 5 to 12.5 basis points annually.