By William Trent, CFA of Stock Market Beat
In 1998 the U.S. Securities and Exchange Commission passed a rule requiring issuers to relate their business in plain english when issuing prospectuses. If they expected the spirit of the rule to be extended to other document filings, the word didn’t get to Tech Data (TECD) in time to salvage this 8K filing:
01. Entry into a Material Definitive Agreement.
(a) Effective March 20, 2007, Tech Data Corporation entered into the Third Amended And Restated Credit Agreement, an amendment to its Amended and Restated Credit Agreement dated as of May 2, 2003, as amended by a Second Amended and Restated Credit Agreement dated as of March 7, 2005, and as further amended prior to the date hereof, pursuant to which the Lenders have made available to the Borrower a multicurrency revolving credit facility including a letter of credit subfacility and swing line subfacility.
If that isn’t as clear as mud we don’t know what is. Given that the associated material news was positive (an extension to the terms and lower interest rates and fees), we can’t imagine why they chose to obfuscate it. By comparison, look at the filing made by Starbucks (SBUX) the same day:
On March 27, 2007 (the “Effective Date”), Starbucks Corporation (the “Company”) entered into a new commercial paper program (the “Program”) on a private placement basis under which the Company may issue unsecured commercial paper notes (the “Notes”) up to a maximum aggregate amount outstanding at any time of up to $1,000,000,000. Under the Program, the Company may issue commercial paper from time to time, and the proceeds of the commercial paper financing will be used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchases.
Apparently Starbucks has people who can translate into plain English.
Disclosure: Author is long Starbucks (SBUX) at time of publication.
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