Item 1.01. Entry into a Material Definitive Agreement.
4.250% Senior Notes due 2028 and Indenture
On September 26, 2019, CDW LLC (“CDW LLC”) and CDW Finance Corporation (“CDW Finance,” and together with CDW LLC, the “Co-Issuers”) completed the sale of $600,000,000 aggregate principal amount of 4.250% senior notes due 2028 (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 April 1, 2028 and bear interest at a rate of 4.250% per annum, payable semi-annually on April 1 and October 1 of each year. Interest will accrue from September 26, 2019, and the first interest payment date will be April 1, 2020.
The Notes were issued pursuant to an indenture (the “Base Indenture”), dated as of December 1, 2014, among the Co-Issuers, CDW Corporation (the “Company”), certain other guarantors named therein (the “Guarantors”) and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by a supplemental indenture, dated as of September 26, 2019, 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 October 1, 2022 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 October 1, 2022 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 October 1, 2022, the Co-Issuers may redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 104.250% 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 Co-Issuers experience certain change of control events, Note holders may require them 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 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.