Item 1.01 Entry into a Material Definitive Agreement.
On August 9, 2021, Pilgrim’s Pride Corporation (the “Company”), and certain of the Company’s subsidiaries entered into a Fifth Amended and Restated Credit Agreement (the “New
Credit Agreement”) with CoBank, ACB, as administrative agent and collateral agent, and the other lenders party thereto. The New Credit Agreement increased the size of the revolver from $750.0 million to $800.0 million, increased the size of the term
loan from an outstanding principal amount of approximately $431.3 million to $700.0 million (providing a delayed draw term loan commitment of approximately $268.7 million) and amended certain covenants.
In addition, under the New Credit Agreement, the maturity date of the revolving loan commitment and the term loans was extended from July 20, 2023 to August 9, 2026.
Outstanding borrowings under the revolving loan commitment and the term loans bear interest at a per annum rate equal to (i) in the case of LIBOR loans, based on the Company’s net
senior secured leverage ratio, between LIBOR plus 1.25% and LIBOR plus 2.75% and (ii) in the case of base rate loans, based on the Company’s net senior secured leverage ratio, between the base rate plus 0.25% and base rate plus 1.75% thereafter.
The New Credit Agreement continues to contain customary financial and other various covenants for transactions of this type, including restrictions on the Company's ability to
incur additional indebtedness, incur liens, pay dividends, make certain restricted payments, consummate certain asset sales, enter into certain transactions with the Company’s affiliates, or merge, consolidate and/or sell or dispose of all or
substantially all of our assets.
All obligations under the New Credit Agreement continue to be unconditionally guaranteed by certain of the Company’s non-Mexican and non-European subsidiaries and continue to be
secured by a first priority lien on substantially all of the assets of the Company and its non-Mexican and non-European subsidiaries that constitute guarantors.
The foregoing description of the New Credit Agreement and the transactions contemplated by the New Credit Agreement does not purport to be complete and is qualified in its
entirety by reference to the text of the New Credit Agreement, which is filed as Exhibit 10.1 hereto and incorporated into this report by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
10.1
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Fifth Amended and Restated Credit Agreement, dated as of August 9, 2021.
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