agent, and the institutions from time to time party thereto as lenders, providing for a revolving credit facility in an aggregate principal amount of $250.0 million and letters of credit in an aggregate amount of up to $20.0 million. The outstanding amounts under the credit agreement must be repaid on or before March 10, 2027. On the Closing Date, New BellRing borrowed $109.0 million under the credit agreement in connection with the transactions (as defined below).
Borrowings under the credit agreement bear interest at an annual rate equal to: (a) in the case of loans denominated in U.S. Dollars, at New BellRing’s option, the base rate (as defined in the credit agreement) plus a margin which will initially be 2.00% and thereafter will range from 2.00% to 2.75% depending on New BellRing’s secured net leverage ratio (as defined in the credit agreement), or the adjusted term SOFR rate (as defined in the credit agreement) for the applicable interest period plus a margin which will initially be 3.00% and thereafter will range from 3.00% to 3.75% depending on New BellRing’s secured net leverage ratio; (b) in the case of loans denominated in Euros, the adjusted Eurodollar rate (as defined in the credit agreement) for the applicable interest period plus a margin which will initially be 3.00% and thereafter will range from 3.00% to 3.75% depending on New BellRing’s secured net leverage ratio; and (c) in the case of loans denominated in U.K. Pounds Sterling, the adjusted daily simple RFR (as defined in the credit agreement) plus a margin which will initially be 3.00% and thereafter will range from 3.00% to 3.75% depending on New BellRing’s secured net leverage ratio. Facility fees on the daily unused amount of commitments under the credit agreement will initially accrue at the rate of 0.25% per annum, and thereafter, depending on New BellRing’s secured net leverage ratio, will accrue at rates ranging from 0.25% to 0.375% per annum.
The credit agreement provides for potential incremental revolving and term facilities at New BellRing’s request and at the discretion of the lenders or other persons providing such incremental facilities, in each case on terms to be determined, and also permits New BellRing to incur other secured or unsecured debt, in all cases subject to conditions and limitations on the amount as specified in the credit agreement.
In addition, the credit agreement contains customary affirmative and negative covenants for agreements of this type, including delivery of financial and other information; compliance with laws; maintenance of property, existence, insurance and books and records; inspection rights; obligation to provide collateral and guarantees by certain new subsidiaries; delivery of environmental reports; participation in an annual meeting with the agent and the lenders; further assurances; and limitations with respect to indebtedness, liens, fundamental changes, restrictive agreements, use of proceeds, amendments of organization documents, prepayments and amendments of certain indebtedness, dispositions of assets, acquisitions and other investments, sale leaseback transactions, changes in the nature of business, transactions with affiliates and dividends and redemptions or repurchases of stock.
The credit agreement also contains a financial covenant requiring New BellRing to maintain a total net leverage ratio (as defined in the credit agreement) not to exceed 6.00 to 1.00, measured as of the last day of each fiscal quarter, beginning with the fiscal quarter ending June 30, 2022.
Furthermore, the credit agreement provides for customary events of default. Upon the occurrence and during the continuance of an event of default, the maturity of the loans under the credit agreement may accelerate and the administrative agent and lenders under the credit agreement may exercise other rights and remedies available at law or under the loan documents, including with respect to the collateral and guarantees of New BellRing’s obligations under the credit agreement.
New BellRing’s obligations under the credit agreement are unconditionally guaranteed by its existing and subsequently acquired or organized direct and indirect domestic subsidiaries (other than immaterial domestic subsidiaries and certain excluded subsidiaries) and are secured by security interests in substantially all of New BellRing’s assets and the assets of its subsidiary guarantors, but excluding, in each case, real property.
The foregoing description of the credit agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the credit agreement, which is filed as Exhibit 10.5 hereto and is incorporated by reference herein.
Indenture
On the Closing Date, as provided in the transaction agreement (as defined below), New BellRing issued to Post 7.00% senior notes due 2030 (the “notes”) in an aggregate principal amount of $840.0 million. The notes were issued under an Indenture dated as of the Closing Date, by and among New BellRing and Computershare Trust Company, N.A. as trustee (the “indenture”).