Summary
McKesson Corporation (MCK) filed an 8-K on October 23, 2015, to announce significant updates regarding its financing arrangements. The company entered into a new, larger $3.5 billion revolving credit facility, maturing in October 2020, which replaces its previous credit facilities, including a $1.3 billion senior unsecured revolving credit facility and a $1.35 billion accounts receivable facility. This move is aimed at consolidating global liquidity resources and simplifying its financial structure. The new credit facility provides a substantial increase in available credit, enhancing McKesson's financial flexibility for general corporate purposes. The company also terminated its accounts receivable facility, which will officially conclude in January 2016. These actions reflect a strategic effort to streamline debt management and strengthen the company's liquidity position.
Key Highlights
- 1McKesson entered into a new $3.5 billion revolving credit facility maturing in October 2020.
- 2The new facility replaces the previous $1.3 billion senior unsecured revolving credit facility and other facilities.
- 3The company terminated its $1.35 billion accounts receivable facility, with termination effective January 21, 2016.
- 4The primary goal of these changes is to consolidate McKesson's global liquidity resources.
- 5The new credit facility includes a sublimit of $3.15 billion for borrowings in Canadian Dollars, British Pounds Sterling, and Euros.
- 6A debt-to-capital ratio of no greater than 65% must be maintained under the new credit facility.
- 7Funds from the new facility are available for general corporate purposes.