Anixter International Inc. Financial Statement Analysis
Inventory Facility
ANIXTER INTERNATIONAL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
On October 5, 2015, Anixter and certain of its wholly-owned subsidiaries, including the Tri-Ed Subsidiaries and Power
Solutions Subsidiaries, entered into the Inventory Facility, an asset based lending revolving credit facility, in an aggregate
committed amount of $150.0 million. Borrowings under the Inventory Facility are secured by a first lien on Anixter Inc.'s and
certain of its subsidiaries' personal property and supported by a guarantee by Anixter International Inc.
The Inventory Facility has a borrowing base, (a) with respect to appraised eligible domestic inventory, of the lesser of
(i) 85% of the net orderly liquidation value of such inventory; and (ii) 75% of book value of such inventory, plus, (b) with
respect to eligible domestic inventory not appraised, 40% of the net orderly liquidation value of such inventory, less (c) certain
reserves.
The Receivables Facility and the Inventory Facility (collectively, the "Combined Facilities")
The Combined Facilities drawn pricing will range from LIBOR plus 125 basis points when the combined unused
availability (the "Combined Availability") under the Combined Facilities is greater than $500.0 million or LIBOR plus 150
basis points when Combined Availability is less than $500.0 million. Undrawn fees are 25 basis points.
Acquisitions and restricted payments will be permitted, subject to, among other things, (i) Combined Availability of at
least $131.3 million after giving pro forma effect to any acquisition or restricted payment or (ii) (a) Combined Availability of at
least $93.8 million and (b) maintenance of a minimum fixed charge coverage ratio of at least 1.1x, after giving pro forma effect
to the acquisition or restricted payment.
The Combined Facilities provides for customary representations and warranties and customary events of default, generally
with corresponding grace periods, including, without limitation, payment defaults with respect to the facility, covenant
defaults, cross-defaults to other agreements evidencing material indebtedness, certain judgments and events of bankruptcy.
Canadian Term Loan
On October 5, 2015, Anixter, through its wholly-owned subsidiaries, Anixter Canada Inc. and Tri-Ed ULC, entered into a
$300.0 million Canadian dollars (equivalent to approximately $225.0 million USD) Canadian Term Loan. During 2017, the
Company repaid $100.2 million of the outstanding balance. The Company incurred $0.2 million of additional interest expense
in 2017 due to the write-off of deferred financing costs on the early payment of debt. The Canadian Term Loan was guaranteed
by all present and future material Canadian subsidiaries of Anixter Canada Inc. and Tri-Ed ULC as well as Anixter Mid
Holdings BV. The Canadian Term Loan was secured by a first priority security interest in all of the assets of Anixter Canada
Inc. and each of its Canadian subsidiaries, which comprised the borrowing group.
In the fourth quarter of 2017, the Company paid off the Canadian Term Loan in full.
6.00% Senior Notes Due 2025
On November 13, 2018, the Company's primary operating subsidiary, Anixter Inc., completed the issuance of $250.0
million principal amount of Senior notes due 2025 ("Notes due 2025"). The Notes due 2025 were issued at a price that was
98.75% of par, which resulted in a discount related to underwriting fees of $3.1 million. The discount is reported on the
Consolidated Balance Sheet as a reduction to the face amount of the Notes due 2025 and is being amortized to interest expense
over the term of the related debt, using the effective interest method. In addition, $0.8 million of deferred financing costs were
paid, which are being amortized through maturity using the straight-line method. The Notes due 2025 pay interest semi-
annually at a rate of 6.00% per annum and will mature on December 1, 2025. In addition, Anixter Inc. may at any time prior to
September 1, 2025, redeem some or all of the Notes due 2025 at a price equal to 100% of the principal amount plus a "make
whole" premium. At any time on or after September 1, 2025, Anixter Inc. may redeem some or all of the Notes due 2025 at a
price equal to 100% of the principal amount, plus accrued and unpaid interest. If the Company experiences certain kinds of
changes of control, Anixter Inc. must offer to repurchase all of the Notes due 2025 outstanding at 101% of the aggregate
principal amount repurchased, plus accrued and unpaid interest. The proceeds were used along with available borrowings under
Anixter's revolving lines of credit to retire the Company's Senior notes due 2019. Anixter International Inc. fully and
unconditionally guarantees the Notes due 2025, which are unsecured obligations of Anixter Inc.
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