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Item
1.01
Entry into a Material Definitive Agreement
Amended and Restated Credit Agreement
On April 16, 2024, TD SYNNEX Corporation (“TD SYNNEX”) entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with TD SYNNEX UK Acquisition Limited as a designated borrower, the initial lenders party thereto, and Citibank, N.A. (“Citibank”), as administrative agent for the lenders. The Amended and Restated Credit Agreement provides for the extension of a senior unsecured revolving credit facility not to exceed an aggregate principal amount of $3.5 billion (the “Amended and Restated Revolving Commitments”), which revolving credit facility may,
subject to the lenders’ discretion, potentially be increased by up to an aggregate amount of $500 million. As of the effective date of the amendment, there continues to be a senior unsecured term loan outstanding under the Amended and Restated Credit Agreement in an aggregate principal amount of $1,331,250,000 (the “Existing Term Loan”), which was reduced to $581,250,000 in aggregate principal amount after giving effect to a prepayment thereunder with the proceeds of the New Term Loan (as described below).
The Amended and Restated Revolving Commitments were used to refinance the existing $3.5 billion revolving credit facility previously disclosed and will mature on April 16, 2029, subject, in the lender’s discretion, to two one-year extensions upon TD SYNNEX’s prior notice to the lenders.
Loans
borrowed under the Amended and Restated Credit Agreement bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR rate, plus 0.10% credit spread adjustment, plus the Applicable Margin (as defined in the Amended and Restated Credit Agreement), which may range from 1.00% to 1.75% for borrowings under the Amended and Restated Revolving Commitments and 1.125% to 1.75% for the Existing Term Loans, in each case based on TD SYNNEX’s Public Debt Rating (as defined in the Amended and Restated Credit Agreement).
The Amended and Restated Credit Agreement contains various loan covenants that restrict the ability of TD SYNNEX and its subsidiaries to take certain actions, including, incurrence of indebtedness (solely with respect to any subsidiary of TD SYNNEX), creation of liens,
mergers or consolidations, entering into certain transactions with affiliates or changing the nature of their business, in each case, that are customary for similar facilities for similarly rated borrowers. In addition, the Amended and Restated Credit Agreement contains financial covenants which require TD SYNNEX to maintain at the end of any of its fiscal quarters, (i) a ratio of (x) Consolidated Funded Debt (as defined in the Amended and Restated Credit Agreement) to (y) Consolidated EBITDA (as defined in the Amended and Restated Credit Agreement) of 4.00 to 1.00 thereafter, and (ii) a ratio of (x) Consolidated EBITDA to (y) Consolidated Interest Charges (as defined in the Amended and Restated Credit Agreement) of not less than 3.00 to 1.00. The Amended and Restated Credit Agreement also contains various customary events of default, including with respect to a change of control of TD SYNNEX.
Term Loan Agreement
On
April 19, 2024, TD SYNNEX entered into a Term Loan Credit Agreement (the “New Term Loan Credit Agreement” and, together with the Amended and Restated Credit Agreement, the “Credit Agreements”) with the initial lenders party thereto, Bank of America, N.A. (“Bank of America”), as administrative agent for the lenders, and BOFA Securities, Inc., as lead arranger and lead bookrunner. The New Term Loan Credit Agreement provides for the extension of a senior unsecured term loan in an aggregated principal amount of $750 million (the “New Term Loan”).
The proceeds of the New Term Loan were used to prepay a portion of the Existing Term Loan and will mature on September 1, 2027.
Loans borrowed under the New
Term Loan Credit Agreement bear interest, in the case of SOFR rate loans, at a per annum rate equal to the applicable SOFR rate, plus 0.10% credit spread adjustment, plus the Applicable Margin (as defined in the New Term Loan Credit Agreement), which may range from 1.00% to 1.625%, based on TD SYNNEX’s Public Debt Rating (as defined in the New Term Loan Credit Agreement).
The New Term Loan Credit Agreement contains various loan covenants that restrict the ability of TD SYNNEX and its subsidiaries to take certain actions, including, incurrence of indebtedness (solely with respect to any subsidiary of TD SYNNEX), creation of liens, mergers or consolidations, entering into certain transactions with affiliates or changing the nature of their business, in each case, that are customary for similar facilities for
similarly rated borrowers. In addition, the New Term Loan Credit Agreement contains financial covenants which require TD SYNNEX to maintain at the end of any of its fiscal quarters, (i) a ratio of (x) Consolidated Funded Debt (as defined in the New Term Loan Credit Agreement) to (y) Consolidated EBITDA (as defined in the New Term Loan Credit Agreement) of 4.00 to 1.00 thereafter, and (ii) a ratio of (x) Consolidated EBITDA to (y) Consolidated Interest Charges (as defined in the New Term Loan Credit Agreement) of not less than 3.00 to 1.00. The New Term Loan Credit Agreement also contains various customary events of default, including with respect to a change of control of TD SYNNEX.
The foregoing description of the Credit Agreements is qualified in its entirety by reference to the full text of the Credit Agreements which are attached hereto as Exhibit
10.1 and Exhibit 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.
Cover
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+Schedules (or similar attachments) and certain information have been omitted pursuant to Items 601(a)(5), 601(a)(6) and/or 601(b)(10)(iv) of Regulation S-K. TD SYNNEX hereby undertakes to furnish supplementally a copy of any omitted schedule or exhibit to such agreement to the U.S. Securities and Exchange Commission upon request; provided, however, that TD SYNNEX may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedules or exhibits so furnished.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
