Dean Foods Company (NASDAQ:DF) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Senior Secured Revolving Credit
Facility
Dean Foods Company, a Delaware corporation (the Company)
previously entered into a Credit Agreement, dated as of March26,
2015, by and among the Company; the subsidiary guarantors
thereto; the Lenders from time to time party thereto; and Bank of
America, N.A., as administrative agent (as amended to date, the
Existing Credit Agreement) to which the Company established a
five-year senior secured revolving credit facility in a principal
amount up to $450 million with an option to request an increase
in the aggregate commitments under the facility by up to $200
million. On January4, 2017, the Company and the subsidiary
guarantors party thereto entered into a Second Amendment to the
Credit Agreement with Bank of America, N.A., as administrative
agent, and the lenders party thereto (the Amendment; the Existing
Credit Agreement as amended by the Amendment, the Credit
Agreement).
Terms modified by the Amendment apply to all lenders under the
Credit Agreement, including the lenders added to the Amendment,
and include the following:
extension of the maturity date of the revolving credit facility
to January4, 2022;
modification of the leverage ratio covenant to add a requirement
that the Company comply with a maximum total net leverage ratio
(which, for purposes of calculating indebtedness, excludes
borrowings under our receivables securitization facility) not to
exceed 4.25 to 1.00 and to eliminate the maximum senior secured
net leverage ratio requirement;
modification of the definition of Consolidated EBITDA to permit
certain pro forma cost savings add-backs in connection with
permitted acquisitions and dispositions;
modification of the definition of Applicable Rate to reduce the
interest rate margins such that loans outstanding under the
revolving credit facility will bear interest, at the Companys
option, at either (i)the LIBO Rate (as defined in the Credit
Agreement) plus a margin of between 1.75% and 2.50% (initially
2.00%) based on the Companys total net leverage ratio, or (ii)the
Alternate Base Rate (as defined in the Credit Agreement) plus a
margin of between 0.75% and 1.50% (initially 1.00%) based on the
Companys total net leverage ratio;
modification of certain negative covenants to provide additional
flexibility for the incurrence of debt, the payment of dividends
and the making of certain permitted acquisitions and other
investments;
elimination and release of all real property as collateral for
loans under the revolving credit facility; and
addition to provide the Company the ability to request that
increases in the aggregate commitments under the revolving credit
facility be made available as either revolving loans or term
loans.
In connection with the Amendment, the Company paid certain
consent fees to the lenders consenting to the Amendment,
certain upfront fees to new lenders joining the credit facility
and certain arrangement fees to the arranger of the Amendment.
This description of the Amendment is qualified in its entirety
by reference to the full text of the Amendment, which is
attached as Exhibit10.1 to this Current Report on Form8-K and
incorporated by reference herein.
Amendment to Receivables-Backed
Facility
The Company and certain of its subsidiaries that are party to
its $550 million receivables securitization facility previously
entered into a Seventh Amended and Restated Receivables
Purchase Agreement, dated as of March26, 2015 (the Existing
RPA), by and among (1)Dairy Group Receivables, L.P. and Dairy
Group Receivables II, L.P., as sellers, each of which is a
subsidiary of the Company; (2)the financial institutions that
are party to the Existing RPA; (3)Cooperatieve Rabobank U.A.,
New York Branch, as agent; (4)PNC Bank, National Association,
as LC Bank; (5)the Company, as provider of certain performance
undertakings on behalf of its subsidiaries; and (6)each of the
Companys subsidiaries that is a party to the Exiting RPA, as
servicers.
On January4, 2017, the Company and certain of its subsidiaries
that are party to the Existing RPA entered into Amendment No.1
to the Receivables Purchase Agreement and Reaffirmation of
Performance Undertaking (the First Amendment; the Existing RPA
as amended by the First Amendment, the Receivables Purchase
Agreement).
Terms modified by the First Amendment include the following:
extension of the liquidity termination date to January4, 2020;
reduction in the maximum size of the receivables securitization
facility to $450 million;
replacement of the senior secured net leverage ratio with a
total net leverage ratio to be consistent with the amended
leverage ratio covenant under the Credit Agreement described
above; and
modification of certain pricing terms such that advances
outstanding under the receivables securitization facility will
bear interest between 0.90% and 1.05%, and the Company will pay
an unused fee between 0.40% and 0.55% on undrawn amounts, in
each case based on the Companys total net leverage ratio.
In connection with the First Amendment, the Company paid
certain amendment fees and upfront fees to the financial
institutions that are party to the Receivables Purchase
Agreement.
This description of the First Amendment is qualified in its
entirety by reference to the text of the First Amendment, which
is attached as Exhibit10.2 to this Current Report on Form8-K
and incorporated by reference herein.
Item9.01 Financial Statements and Exhibits.
(d)Exhibits
10.1 Second Amendment to Credit Agreement, dated as of
January4, 2017, by and among Dean Foods Company; the subsidiary
guarantors thereto; the lenders listed on the pagesthereof; and
Bank of America, N.A., as Administrative Agent.
10.2 Amendment No.1 to Seventh Amended and Restated Receivables
Purchase Agreement, dated as of January4, 2017, among Dairy
Group Receivables L.P. and Dairy Group Receivables II, L.P., as
Sellers; the Servicers, Companies and Financial Institutions
listed therein; and Cooperatieve Rabobank U.A., New York
Branch, as Agent.
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
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Date: January6, 2017 |
DEAN FOODS COMPANY |
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By: |
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/s/ Russell F. Coleman |
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Russell F. Coleman |
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Executive Vice President, General Counsel, Corporate |
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Secretary Government Affairs |
EXHIBITINDEX
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ExhibitNo. |
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Description |
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10.1 |
Second Amendment to Credit Agreement, dated as of |
