Cardinal Health Inc.
10/10/2024 | Press release | Distributed by Public on 10/10/2024 04:30
Material Agreement Form 8 K
Item 1.01. Entry into a Material Definitive Agreement
On October 8, 2024, (i) Cardinal Health, Inc. (the "Company"), (ii) Bank of America, N.A., as Administrative Agent and (iii) each lender from time to time party thereto entered into a 364-Day Credit Agreement (the "Credit Agreement").
The Credit Agreement, among other things, allows the Company access to $1.0 billion of revolving credit through October 7, 2025 (the "Termination Date"). The Company is permitted, subject to certain conditions specified in the Credit Agreement, to elect to have the principal of any loans outstanding on the Termination Date converted into non-revolving term loans, which shall be repaid in full on the date that is one year after the Termination Date. Interest rates on borrowings under the Credit Agreement will be based on prevailing interest rates, benchmarked based on Term SOFR and subject to the Company's credit ratings, as described in the Credit Agreement.
The Credit Agreement contains customary representations and affirmative and negative covenants (including restrictions on incurring liens, subsidiary indebtedness and contingent obligations). The financial covenant in the Credit Agreement requires the Company to maintain, as of the last day of any fiscal quarter, a Consolidated Net Leverage Ratio, as such term is defined in the Credit Agreement and subject to certain conditions contained therein, of no greater than 3.75 to 1.00. The Credit Agreement also contains customary events of default (including non-payment of principal or interest and breaches of covenants). If any event of default occurs and is not cured within the applicable grace period, any outstanding loans under the facility may be accelerated by lenders and the lenders' commitments under the Credit Agreement may be terminated. This revolving credit facility may be used for general corporate purposes and backs the Company's commercial paper program.
The descriptions of the provisions of the Credit Agreement are summary in nature and are qualified in their entirety by reference to the full and complete terms of the Credit Agreement, which is filed herewith as Exhibit 10.1.
Also on October 8, 2024, the Company and The Bank of New York Mellon, as Issuing and Paying Agent, entered into a Fourth Amendment to Issuing and Paying Agency Agreement dated August 9, 2006 (the "Issuing and Paying Agency Agreement") to increase the maximum principal amount of commercial paper notes permitted to be outstanding under its commercial paper program from $2.0 billion to $3.0 billion.
Certain of the financial institutions party to the Credit Agreement and the Issuing and Paying Agency Agreement or their respective affiliates, and the dealers under the Company's commercial paper program, have performed and may in the future perform various lending, commercial banking, investment banking, financial advisory, securitization, trustee or other services for the Company. The Company pays these financial institutions customary fees and expenses for these services.