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TD Synnex 8-K Report, Material Agreement (Apr 22, 2024)

Reports
Material Agreements·Exhibits & Filings
Filing Date
Filed April 22, 2024
Period End
April 16, 2024
Security
SNX
In the record · 2016–202610-K1110-Q338-K163

SNX filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 163 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’18Oct ’18
  2. Deal closed8-K · Dec ’20Dec ’20
  3. Leadership change8-K · Sep ’22Sep ’22
  4. Material agreement8-K · Sep ’26Sep ’26

01—Abstract

Summary

Summary of the 8-K filed April 22, 2024. Cited figures are marked; the original filing is the authoritative source.

TD SYNNEX Corporation entered into two new credit arrangements in April 2024 to refinance and extend its debt.

On April 16, 2024, it entered into an Amended and Restated Credit Agreement with TD SYNNEX UK Acquisition Limited as a designated borrower, Citibank, N.A. as administrative agent, and the initial lenders party thereto. The agreement provides a senior unsecured revolving credit facility of up to $3.5 billion, which may be increased by up to $500 milliona at the lenders' discretion. The revolving commitments were used to refinance the existing $3.5 billion revolving facility and mature on April 16, 2029, subject to two one-year extensions at the lenders' discretion.

An existing senior unsecured term loan of $1,331,250,000b remains outstanding under this agreement, reduced to $581,250,000 after a prepayment funded by the New Term Loan. On April 19, 2024, TD SYNNEX entered into a Term Loan Credit Agreement with Bank of America, N.A. as administrative agent and BofA Securities, Inc. as lead arranger and lead bookrunner. This provides a $750 million senior unsecured term loan maturing September 1, 2027, with proceeds used to prepay a portion of the Existing Term Loan.

Borrowings under both agreements bear interest at SOFR plus a 0.10%c credit spread adjustment plus an applicable margin tied to TD SYNNEX's Public Debt Rating. Under the revolving facility, the margin ranges from 1.00% to 1.75%, and for the existing term loan from 1.125% to 1.75%. For the new term loan, the margin ranges from 1.00% to 1.625%.

Both agreements contain customary covenants restricting indebtedness at subsidiaries, liens, mergers, affiliate transactions, and changes in business nature. Both also require a maximum ratio of Consolidated Funded Debt to Consolidated EBITDA of 4.00 to 1.00 and a minimum ratio of Consolidated EBITDA to Consolidated Interest Charges of 3.00 to 1.00, tested at each fiscal quarter end.

Both include customary events of default, including a change of control of TD SYNNEX. The full agreements are filed as Exhibits 10.1 and 10.2, with certain schedules omitted under Regulation S-K.

02—Key points

Key Highlights

  1. Entered an Amended and Restated Credit Agreement on April 16, 2024, providing a $3.5 billion senior unsecured revolving credit facility, expandable by up to $500 million at lender discretion.
  2. The revolving facility refinances the existing $3.5 billion revolving facility and matures April 16, 2029, with two possible one-year extensions at lender discretion.
  3. Entered a new $750 million senior unsecured term loan on April 19, 2024 with Bank of America, N.A. as administrative agent, maturing September 1, 2027.
  4. Proceeds of the new $750 million term loan were used to prepay part of the existing term loan, reducing it from $1,331,250,000 to $581,250,000.
  5. Borrowing margins over SOFR (plus a 0.10% credit spread adjustment) are tied to TD SYNNEX's Public Debt Rating: 1.00% to 1.75% on the revolver, 1.125% to 1.75% on the existing term loan, and 1.00% to 1.625% on the new term loan.
  6. Both agreements require a maximum Consolidated Funded Debt to Consolidated EBITDA ratio of 4.00 to 1.00 and a minimum Consolidated EBITDA to Consolidated Interest Charges ratio of 3.00 to 1.00, tested at each fiscal quarter end.

03—Questions

Frequently Asked Questions

  1. What is the size and maturity of TD SYNNEX's revolving credit facility?

    The Amended and Restated Credit Agreement provides a senior unsecured revolving credit facility of up to $3.5 billion, which may be increased by up to $500 million at the lenders' discretion. It matures on April 16, 2029, subject to two one-year extensions at the lenders' discretion upon TD SYNNEX's prior notice.

  2. Why did TD SYNNEX enter into the new term loan?

    The filing states that the $750 million New Term Loan's proceeds were used to prepay a portion of the Existing Term Loan, reducing its outstanding principal from $1,331,250,000 to $581,250,000.

  3. How is the interest rate on these borrowings determined?

    SOFR rate loans bear interest at the applicable SOFR rate plus a 0.10% credit spread adjustment plus an Applicable Margin. The margin is based on TD SYNNEX's Public Debt Rating, ranging from 1.00% to 1.75% for the revolver, 1.125% to 1.75% for the existing term loan, and 1.00% to 1.625% for the new term loan.

  4. What financial covenants must TD SYNNEX maintain?

    At the end of each fiscal quarter, TD SYNNEX must maintain a ratio of Consolidated Funded Debt to Consolidated EBITDA of no more than 4.00 to 1.00, and a ratio of Consolidated EBITDA to Consolidated Interest Charges of not less than 3.00 to 1.00. The covenants are the same under both credit agreements.

  5. Would a change of control trigger a default?

    Yes. Both the Amended and Restated Credit Agreement and the New Term Loan Credit Agreement contain customary events of default, including with respect to a change of control of TD SYNNEX.

04—Continue

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