Item 1.01. Entry into a Material Definitive Agreement.
Revolving Credit Agreement
On September 30, 2021, Tyson Foods, Inc. (the “Company”) entered into a Revolving Credit Agreement with certain subsidiaries of the Company from time to time party thereto as subsidiary borrowers, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Revolving Credit Agreement”), which refinanced and replaced the Company’s existing Amended and Restated Credit Agreement, dated as of March 14, 2018, among the Company, the subsidiary borrowers party thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (the “Refinanced Credit Agreement”). The Refinanced Credit Agreement and all commitments thereunder were terminated effective upon the Company’s entry into the Revolving Credit Agreement.
The Revolving Credit Agreement, among other things, provides for aggregate commitments, on a senior unsecured basis, of $2.25 billion and matures on September 30, 2026, subject to two one-year extension options. Interest on borrowings under the Revolving Credit Agreement will accrue and be payable, at the Company’s option, at an annual rate equal to (a) a reserve-adjusted Eurocurrency rate plus the applicable spread or (b) the alternate base rate plus the applicable spread, each as described below. The Revolving Credit Agreement contains customary provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on borrowings based on LIBOR. The applicable spread will be the percentage described in the following chart that corresponds to the Company’s corporate credit rating from S&P or Moody’s, as applicable.
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Ratings Level Moody’s/S&P
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Eurocurrency Spread
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ABR Spread
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Level 1
A2/A or above
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0.805%
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0.000%
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Level 2
A3/A-
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0.910%
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0.000%
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Level 3
Baa1/BBB+
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1.025%
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0.025%
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Level 4
Baa2/BBB
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1.125%
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0.125%
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Level 5
Baa3/BBB- or below
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1.200%
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0.200%
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The covenants under the Revolving Credit Agreement are generally consistent with those in the Refinanced Credit Agreement and include negative covenants limiting subsidiary indebtedness; liens; swap agreements (with exceptions for certain swap agreements entered into to hedge or mitigate risks to which the Company or a subsidiary has actual exposure); mergers, consolidations, liquidations and dissolutions; transactions with affiliates; asset sales; and changes in lines of business of the Company and its subsidiaries, in each case subject to certain exceptions. In addition, and consistent with the Refinanced Credit Agreement, the Revolving Credit Agreement requires the Company to maintain a minimum interest expense coverage ratio (consolidated EBITDA to consolidated cash interest expense, each as defined in the Revolving Credit Agreement) of at least 3.50 to 1.0 as of the end of each fiscal quarter (in each case, calculated on a trailing four fiscal quarter basis). Under the Revolving Credit Agreement, consolidated EBITDA includes additional add-backs to net income for certain costs, fees, taxes, losses, charges, write-offs, write-downs and expenses.
The Revolving Credit Agreement contains events of default substantially consistent with those in the Refinanced Credit Agreement, such as non-payment of obligations under other debt facilities, violation of affirmative or negative covenants, material inaccuracy of representations, non-payment of other material debt, bankruptcy or insolvency, ERISA and certain judgment defaults, change of control and failure of any guarantee to remain in full force and effect.
The foregoing description of the Revolving Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Revolving Credit Agreement, a copy of which is attached hereto as Exhibit 10.1 and incorporated by reference into this Item 1.01.
Item 1.02. Termination of a Material Definitive Agreement.
The information set forth above under Item 1.01 of this Current Report on Form 8-K with respect to the termination of the Refinanced Credit Agreement and all commitments thereunder effective upon the Company’s entry into the Revolving Credit Agreement on September 30, 2021 is hereby incorporated by reference into this Item 1.02. The Refinanced Credit Agreement was previously described under Item 1.01 of the Current Report on Form 8-K filed by the Company on March 20, 2018, which description is hereby incorporated by reference into this Item 1.02.
On September 30, 2021, the Company used cash on hand to repay all outstanding obligations under the Company’s existing Term Loan Agreement, dated as of March 22, 2021 (the “Term Loan Agreement”), with the lenders from time to time party thereto, Bank of America, N.A., as the initial lender and administrative agent, and BofA Securities, Inc., as sole bookrunner and sole lead arranger, pursuant to which there was a $500 million term loan outstanding. Upon such repayment in full of all outstanding obligations under the Term Loan Agreement, the Term Loan Agreement and all commitments thereunder were terminated. The Term Loan Agreement was previously described under Item 1.01 of the Current Report on Form 8-K filed by the Company on March 25, 2021, which description is hereby incorporated by reference into this Item 1.02.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
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Exhibit
Number
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Description
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10.1
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104
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Cover Page Interactive Data File formatted in iXBRL.
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