01—Abstract
Summary
Summary of the 8-K filed March 8, 2024. Cited figures are marked; the original filing is the authoritative source.
On March 7, 2024, WESCO Distribution, Inc., a wholly owned subsidiary of WESCO International, Inc., completed a private offering of $900 milliona of 6.375% senior notes due 2029 and $850 million of 6.625% senior notes due 2032, each issued at 100% of principal amount.
Net proceeds were approximately $1,728.4 millionb after discounts to the initial purchasers and estimated offering expenses. The Notes are unsecured, unsubordinated obligations of WESCO Distribution, guaranteed on the same basis by WESCO International, Inc. and its wholly owned subsidiary Anixter Inc. Interest is payable semi-annually beginning September 15, 2024. The company intends to use the proceeds to redeem all of its outstanding 7.125% senior notes due 2025 on or after June 15, 2024, and for general corporate purposes.
Before that redemption, it plans to temporarily repay part of its accounts receivable securitization facility and all outstanding borrowings under its asset-based revolving credit facility, then redraw under both facilities in an amount sufficient to redeem the 2025 notes. On March 8, 2024, WESCO Receivables Corp. and WESCO Distribution amended the Receivables Facility. The amendment reduces the purchase limit from $1,625 million to $1,550 millionc, raises the capacity to request increases from $125 million to $300 million, and extends the termination date to March 1, 2027.
The amendment also adds a commercial paper funding option for conduit purchasers and modifies the drawn spread. The Indenture includes covenants limiting liens, restricted payments, sale-leaseback transactions, certain asset sales and mergers, with certain covenants terminating upon investment grade ratings on the Notes.
02—Key points
Key Highlights
- WESCO Distribution completed $1,750 million in senior notes: $900 million of 6.375% notes due March 15, 2029 and $850 million of 6.625% notes due March 15, 2032, both issued at 100% of principal.
- Net proceeds of approximately $1,728.4 million, after initial purchaser discounts and estimated offering expenses.
- Proceeds are earmarked to redeem all 7.125% senior notes due 2025 on or after June 15, 2024, plus general corporate purposes.
- The Notes are guaranteed by WESCO International, Inc. and Anixter Inc. on an unsecured, unsubordinated basis.
- Receivables Facility purchase limit reduced from $1,625 million to $1,550 million, and termination date extended to March 1, 2027.
- Make-whole redemption is available before March 15, 2026 for the 2029 notes and before March 15, 2027 for the 2032 notes; a change of control triggers an offer to repurchase at 101% of principal.
- The Notes were sold in a private transaction exempt from Securities Act registration and have not been registered.
03—Questions
Frequently Asked Questions
What debt did WESCO Distribution issue and on what terms?
WESCO Distribution issued $900 million of 6.375% senior notes due March 15, 2029 and $850 million of 6.625% senior notes due March 15, 2032, each at 100% of principal. Interest is payable semi-annually on March 15 and September 15, beginning September 15, 2024.
Why is WESCO issuing this debt?
The filing states the company intends to use the net proceeds to redeem all of its outstanding 7.125% senior notes due 2025 on or after June 15, 2024, and for general corporate purposes. Before that redemption, it will temporarily repay amounts under its receivables facility and ABL facility, then redraw under both to fund the redemption.
Who guarantees the new notes?
The Notes are guaranteed on an unsecured, unsubordinated basis by WESCO International, Inc. and its wholly owned subsidiary, Anixter Inc.
What changed in the receivables facility?
The March 8, 2024 amendment reduces the purchase limit from $1,625 million to $1,550 million, increases the capacity for purchase limit increase requests from $125 million to $300 million, extends the termination date to March 1, 2027, adds a commercial paper funding option for conduit purchasers, and modifies the drawn spread.
What protections do noteholders have if control of the company changes?
Upon certain change of control triggering events, the Issuer must offer to repurchase each series of Notes at 101% of principal plus accrued and unpaid interest, subject to certain qualifications and exceptions.
04—Continue