Item 1.01.
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Entry Into a Material Definitive Agreement.
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On October 11, 2019, Post Holdings, Inc. (the “Company” or “Post”) (i) entered into a $1,225.0 million Bridge Facility Agreement among the Company, as borrower, certain subsidiaries of the Company, as guarantors, each lender from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and Morgan Stanley Senior Funding, Inc., BofA Securities, Inc., Citigroup Global Markets Inc., Credit Suisse Loan Funding LLC, Goldman Sachs Bank USA, and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint physical bookrunners (the “Bridge Loan Facility”), and (ii) borrowed $1,225.0 million under the Bridge Loan Facility (the “Bridge Loan”). Also on October 11, 2019, the Company and certain of its subsidiaries entered into a Guarantee and Collateral Agreement with Morgan Stanley Senior Funding, Inc., as administrative agent for the lenders from time to time parties to the Bridge Loan Facility (the “GCA”).
The Bridge Loan bears interest at a rate per annum equal to (i) for the period from and including October 11, 2019 to but excluding October 21, 2019, the Eurodollar Rate (as such term is defined in the Bridge Loan Facility) plus 450 basis points, (ii) for the period from and including October 21, 2019 to but excluding October 25, 2019, the Eurodollar Rate plus 500 basis points, (iii) for the period from and including October 25, 2019 to but excluding February 8, 2020, 12.00% and (iv) for the period from and including February 8, 2020 to but excluding the maturity date, 12.25%. Payments of interest on the Bridge Loan are due on October 21, 2019, October 25, 2019, December 31, 2019 and the last day of each quarter thereafter until maturity. The Bridge Loan Facility matures on August 23, 2024. Under the GCA, Post’s guarantor subsidiaries guarantee Post’s payment and performance obligations under the Bridge Loan Facility.
The Bridge Loan Facility was entered into in connection with the previously announced initial public offering of BellRing Brands, Inc. (the “IPO”) and the formation transactions to be undertaken by Post, BellRing Brands, Inc. and BellRing Brands, LLC (formerly known as Dymatize Holdings, LLC) in connection with the IPO (the “Formation Transactions”). Upon completion of the IPO and the Formation Transactions, the entities comprising Post’s Active Nutrition Business (generally, the combination of the Company’subsidiaries Premier Nutrition Company, LLC (formerly Premier Nutrition Corporation), Dymatize Enterprises, LLC and Active Nutrition International GmbH, which together provide protein shakes and other ready-to-drink beverages, powders and nutrition bars) will become the direct or indirect subsidiaries of BellRing Brands, LLC.
On the day the IPO is completed, BellRing Brands, LLC will enter into an assignment and assumption agreement with Post and the administrative agent (on behalf of the lenders) under the Bridge Loan Facility pursuant to which (i) BellRing Brands, LLC will become the borrower under the Bridge Loan, and Post and its subsidiary guarantors (which will not include BellRing Brands, LLC or its subsidiaries) will be released from their respective obligations thereunder, (ii) the domestic subsidiaries of BellRing Brands, LLC will continue to guarantee the Bridge Loan and (iii) the obligations of BellRing Brands, LLC under the Bridge Loan will become secured by a first priority security interest in substantially all of the assets of BellRing Brands, LLC and in substantially all of the assets of its subsidiary guarantors. Post will retain the net cash proceeds of the Bridge Loan. It is expected that the Bridge Loan will be repaid in full by BellRing Brands, LLC with the net proceeds of the IPO and the net proceeds of BellRing Brands, LLC’s borrowings under the debt facilities (the “BellRing Facilities”) described in BellRing Brands, Inc.’s registration statement on Form S-1 for the IPO, as amended.
Following the assumption by BellRing Brands, LLC of the Bridge Loan Facility, Post intends to use the cash proceeds of the Bridge Loan (after deducting fees and expenses) to repay a portion of the existing term loan under Post’s existing credit agreement.
The foregoing summary of the Bridge Loan Facility does not purport to be complete and is qualified in its entirety by reference to the full text of the Bridge Loan Facility and the GCA, copies of which are attached as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated herein by reference.