Item 1.01. Entry into a Material Definitive Agreement.
3.25% Senior Notes due 2029
On August 13, 2020, CDW LLC ("CDW") and CDW Finance Corporation ("CDW Finance,"
and together with CDW, the "Co-Issuers") completed the sale of $700,000,000
aggregate principal amount of 3.25% senior notes due 2029 (the "Notes") at an
issue price of 100% of the principal amount of the Notes in an offering
registered under the Securities Act of 1933, as amended (the "Securities Act").
The Notes mature on February 15, 2029 and bear interest at a rate of 3.25% per
annum, payable semi-annually on February 15 and August 15 of each year. Interest
will accrue from August 13, 2020, and the first interest payment date will be
February 15, 2021.
Underwriting Agreement
On August 10, 2020, the Co-Issuers entered into an underwriting agreement (the
"Underwriting Agreement") among the Co-Issuers, CDW Corporation (the "Company"),
certain other guarantors named therein (the "Guarantors") and the underwriters
named therein (the "Underwriters") in connection with the offer and sale of the
Notes. The Underwriting Agreement contains customary representations and
warranties of the parties and indemnification and contribution provisions
whereby the Co-Issuers, the Company and the Guarantors, on the one hand, and the
Underwriters, on the other hand, have agreed to indemnify each other against
certain liabilities.
The offering was made pursuant to (i) an effective Registration Statement on
Form S-3ASR (the "Registration Statement") filed with the Securities and
Exchange Commission (the "SEC") on October 16, 2017 (File No. 333-220980),
including a related base prospectus dated October 16, 2017 and (ii) a related
prospectus supplement dated August 10, 2020 and filed with the SEC on August 10,
2020 pursuant to Rule 424(b)(5) under the Securities Act.
The description of the Underwriting Agreement in this Current Report on Form 8-K
is a summary and is qualified in its entirety by the terms of the Underwriting
Agreement. The Underwriting Agreement is attached as Exhibit 1.1 to this Current
Report on Form 8-K and is incorporated herein by reference and is to be
incorporated in its entirety into the Registration Statement.
Indenture
The Notes were issued pursuant to an indenture (the "Base Indenture"), dated as
of December 1, 2014, among the Co-Issuers, the Company, the Guarantors and U.S.
Bank National Association, as trustee (the "Trustee"), as supplemented by a
supplemental indenture, dated as of August 13, 2020, among the Co-Issuers, the
Company, the Guarantors and the Trustee (the "Supplemental Indenture," and the
Base Indenture as so supplemented, the "Indenture").
The Co-Issuers may redeem the Notes, in whole or in part, at any time prior to
August 15, 2023 at a redemption price equal to 100% of the principal amount of
Notes redeemed, plus accrued and unpaid interest to the redemption date, plus
the "make whole" premium, as described in the Indenture. The Co-Issuers may
redeem the Notes, in whole or in part, at any time on or after August 15, 2023
at a redemption price equal to 100% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest to the redemption date, plus a
premium declining over time as set forth in the Indenture. In addition, at any
time prior to August 15, 2023, the Co-Issuers may redeem up to 40% of the
aggregate principal amount of the Notes at a redemption price equal to 103.250%
of the principal amount of Notes redeemed, plus accrued and unpaid interest to
the redemption date, with the net cash proceeds that are raised in one or more
equity offerings. If the Company experiences certain change of control events,
Note holders may require the Co-Issuers to repurchase all or part of their Notes
at 101% of the principal amount of the Notes, plus accrued and unpaid interest
to the repurchase date.
The Indenture contains covenants that, among other things, restrict the ability
of CDW LLC and the Guarantors to incur or guarantee additional non-guarantor
indebtedness, or issue non-guarantor preferred stock; create liens on certain
assets to secure debt; enter into sale and lease-back transactions; consolidate,
merge, sell or otherwise dispose of all or substantially all assets; and
designate subsidiaries as unrestricted subsidiaries. The Indenture also contains
certain restrictions on the business activities, assets and liabilities of CDW
Finance. These covenants are subject to a number of other limitations and
exceptions set forth in the Indenture.
The Indenture also provides for customary events of default, including failure
to pay any principal or interest when due; failure to comply with covenants; and
cross-acceleration provisions. In the case of an event of default arising from
specified events of bankruptcy or insolvency, all outstanding Notes will become
due and
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payable immediately without further action or notice. If any other event of
default under the Indenture occurs or is continuing, the Trustee, acting at the
written direction of the holders of at least 25% in aggregate principal amount
of the then-outstanding Notes, may declare all of the Notes to be due and
payable immediately.
The description of the Indenture and the Notes in this Current Report on Form
8-K is a summary and is qualified in its entirety by the complete text of the
Indenture and the Notes. The Base Indenture, the Supplemental Indenture and a
form of the Notes are attached as Exhibits 4.1, 4.2 and 4.3, respectively, to
this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated by reference
into this Item 2.03.
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial
Obligation under an Off-Balance Sheet Arrangement.
On August 10, 2020, the Co-Issuers called for redemption all of their
outstanding $600 million aggregate principal amount of 5.0% senior notes due
2025 (the "Senior Notes") at a redemption price of 103.750% of the principal
amount redeemed, plus accrued and unpaid interest to, but not including, the
date of redemption. The redemption date will be September 9, 2020.
A copy of the press release announcing the redemption of the Senior Notes is
attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
This Current Report on Form 8-K is not an offer to buy, or a notice of
redemption with respect to, the Senior Notes or any other securities.
Item 8.01. Other Events.
In connection with the execution of the Underwriting Agreement, on August 10,
2020, the Company issued a press release announcing that the Co-Issuers priced
the Notes in a registered offering. A copy of the press release announcing the
pricing of the registered offering of the Notes is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
This Current Report on Form 8-K is neither an offer to sell nor the solicitation
of an offer to buy the Notes or any other securities.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
1.1 Underwriting Agreement, dated as of August 10, 2020, by and among
the Co-Issuers, the Company, the Guarantors and the Underwriters.
4.1 Base Indenture, dated as of December 1, 2014, by and among the
Co-Issuers, the Company, the Guarantors and the Trustee, previously
filed as Exhibit 4.1 with the Company's Current Report on Form 8-K
filed on December 1, 2014.
4.2 Supplemental Indenture, dated as of August 13, 2020, by and among
the Co-Issuers, the Company, the Guarantors and the Trustee.
4.3 Form of 3.25% Senior Note (included as Exhibit A to Exhibit 4.2).
5.1 Opinion of Kirkland & Ellis LLP.
5.2 Opinion of Foley & Lardner LLP.
23.1 Consent of Kirkland & Ellis LLP (set forth in Exhibit 5.1).
23.2 Consent of Foley & Lardner LLP (set forth in Exhibit 5.2).
99.1 Press release announcing pricing of the registered offering of the
Notes, dated August 10, 2020.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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