Tyson Foods, Inc. (NYSE:TSN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
Term Loan Agreement
On May 12, 2017, Tyson Foods, Inc. (the Company) entered into a
Term Loan Agreement (the Term Loan Agreement) with the lenders
party thereto and Morgan Stanley Senior Funding, Inc., as
administrative agent. The Term Loan Agreement provides for total
term loan commitments in an aggregate principal amount of $1.8
billion.
Term Loan Agreement (the Term Loan Agreement) with the lenders
party thereto and Morgan Stanley Senior Funding, Inc., as
administrative agent. The Term Loan Agreement provides for total
term loan commitments in an aggregate principal amount of $1.8
billion.
The lenders party to the Term Loan Agreement will be obligated to
make initial loans under the Term Loan Agreement upon the
satisfaction of certain conditions, including but not limited to
(i) the satisfaction or waiver of the Offer Conditions (as
defined in the Agreement and Plan of Merger, dated April 25,
2017, among the Company, AdvancePierre Foods Holdings, Inc. and
DVB Merger Sub, Inc., filed as Exhibit 2.1 to the Current Report
on Form 8-K filed by the Company on April 28, 2017 and
incorporated by reference (the Acquisition Agreement)) in
accordance with the terms and conditions of the Acquisition
Agreement, (ii) the absence of a material adverse effect change
with respect to AdvancePierre Foods Holdings, Inc. since December
31, 2016 through April 25, 2017, and since April 25, 2017 through
closing, (iii) the truth and accuracy of the Acquisition
Agreement Representations and the Specified Representations (each
as defined in the Term Loan Agreement), (iv) the receipt of
certain certificates and organizational documents and (v) the
delivery by the Company of certain financial statements.
make initial loans under the Term Loan Agreement upon the
satisfaction of certain conditions, including but not limited to
(i) the satisfaction or waiver of the Offer Conditions (as
defined in the Agreement and Plan of Merger, dated April 25,
2017, among the Company, AdvancePierre Foods Holdings, Inc. and
DVB Merger Sub, Inc., filed as Exhibit 2.1 to the Current Report
on Form 8-K filed by the Company on April 28, 2017 and
incorporated by reference (the Acquisition Agreement)) in
accordance with the terms and conditions of the Acquisition
Agreement, (ii) the absence of a material adverse effect change
with respect to AdvancePierre Foods Holdings, Inc. since December
31, 2016 through April 25, 2017, and since April 25, 2017 through
closing, (iii) the truth and accuracy of the Acquisition
Agreement Representations and the Specified Representations (each
as defined in the Term Loan Agreement), (iv) the receipt of
certain certificates and organizational documents and (v) the
delivery by the Company of certain financial statements.
Borrowings under the Term Loan Agreement will be unsecured and
will mature on the three-year anniversary of the date on which
lenders are obligated to make initial loans under the Term Loan
Agreement.
will mature on the three-year anniversary of the date on which
lenders are obligated to make initial loans under the Term Loan
Agreement.
Borrowings under the Term Loan Agreement will bear interest at a
rate per annum equal to, at the option of the Company, (i) the
highest of (a) the prime rate of Morgan Stanley Senior Funding,
Inc., (b) the federal funds effective rate plus 0.5% and (c) a
rate based on certain rates offered for U.S. dollar deposits in
the London interbank market (the Eurocurrency Rate) plus 1.0% per
annum, or (ii) the Eurocurrency Rate, in each case plus an
applicable spread that will depend on the credit ratings by each
of SP, and Moodys and Fitch of the Company, as set forth in the
Term Loan Agreement.
rate per annum equal to, at the option of the Company, (i) the
highest of (a) the prime rate of Morgan Stanley Senior Funding,
Inc., (b) the federal funds effective rate plus 0.5% and (c) a
rate based on certain rates offered for U.S. dollar deposits in
the London interbank market (the Eurocurrency Rate) plus 1.0% per
annum, or (ii) the Eurocurrency Rate, in each case plus an
applicable spread that will depend on the credit ratings by each
of SP, and Moodys and Fitch of the Company, as set forth in the
Term Loan Agreement.
Each lender under the Term Loan Agreement is entitled to a
commitment fee, payable quarterly in arrears, at a rate equal to
0.15% per annum of the daily average undrawn commitment of that
lender, accruing from and including May 12, 2017 to but excluding
the date on which all commitments under the Term Loan Agreement
are terminated.
commitment fee, payable quarterly in arrears, at a rate equal to
0.15% per annum of the daily average undrawn commitment of that
lender, accruing from and including May 12, 2017 to but excluding
the date on which all commitments under the Term Loan Agreement
are terminated.
The Term Loan Agreement contains certain covenants, including
limitations on 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. In addition, the Term Loan
Agreement (i) limits the ratio of Tysons debt to capitalization
to a maximum of 0.60 to 1.0, and (ii) requires the ratio of
Tysons consolidated EBITDA to interest to be at least 3.75 to
1.0.
limitations on 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. In addition, the Term Loan
Agreement (i) limits the ratio of Tysons debt to capitalization
to a maximum of 0.60 to 1.0, and (ii) requires the ratio of
Tysons consolidated EBITDA to interest to be at least 3.75 to
1.0.
The Term Loan Agreement contains customary events of default,
such as non-payment of obligations under the Term Loan Agreement,
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.
such as non-payment of obligations under the Term Loan Agreement,
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 Term Loan Agreement is summary
in nature and is qualified in its entirety by reference to the
Term Loan Agreement, a copy of which is attached hereto as
Exhibit 10.1, and incorporated herein by reference.
in nature and is qualified in its entirety by reference to the
Term Loan Agreement, a copy of which is attached hereto as
Exhibit 10.1, and incorporated herein by reference.
Amended and Restated Credit Agreement
On May 12, 2017, the Company entered into an Amended and Restated
Credit Agreement with the subsidiary borrowers from time to time
party thereto, the lenders party thereto and JPMorgan Chase Bank,
N.A., as administrative agent (the Amended and Restated Credit
Agreement), which amended and restated the Companys existing
Credit Agreement, dated as of September 25, 2014 among the
Company, the subsidiary borrowers from time to time party
thereto, the lenders party thereto, and JPMorgan Chase Bank,
N.A., as administrative agent (filed as
Credit Agreement with the subsidiary borrowers from time to time
party thereto, the lenders party thereto and JPMorgan Chase Bank,
N.A., as administrative agent (the Amended and Restated Credit
Agreement), which amended and restated the Companys existing
Credit Agreement, dated as of September 25, 2014 among the
Company, the subsidiary borrowers from time to time party
thereto, the lenders party thereto, and JPMorgan Chase Bank,
N.A., as administrative agent (filed as
Exhibit 10.1 to the Current Report on Form 8-K filed by the
Company on September 29, 2014 and incorporated by reference (the
Existing Credit Agreement)).
Company on September 29, 2014 and incorporated by reference (the
Existing Credit Agreement)).
The Amended and Restated Credit Agreement, among other things,
(i) increased the aggregate commitments under the Existing Credit
Agreement from $1.25 billion to $1.5 billion and (ii) extended
the maturity date thereunder to May 12, 2022.
(i) increased the aggregate commitments under the Existing Credit
Agreement from $1.25 billion to $1.5 billion and (ii) extended
the maturity date thereunder to May 12, 2022.
The covenants under the Amended and Restated Credit Agreement are
substantially consistent with those in the Existing Credit
Agreement and include limitations on 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. In
addition, and consistent with the Existing Credit Agreement, the
Amended and Restated Credit Agreement (i) limits the ratio of
Tysons debt to capitalization to a maximum of 0.60 to 1.0, and
(ii) requires the ratio of Tysons consolidated EBITDA to interest
to be at least 3.75 to 1.0.
substantially consistent with those in the Existing Credit
Agreement and include limitations on 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. In
addition, and consistent with the Existing Credit Agreement, the
Amended and Restated Credit Agreement (i) limits the ratio of
Tysons debt to capitalization to a maximum of 0.60 to 1.0, and
(ii) requires the ratio of Tysons consolidated EBITDA to interest
to be at least 3.75 to 1.0.
The Amended and Restated Credit Agreement contains events of
default substantially consistent with those in the Existing
Credit Agreement, such as non-payment of obligations under the
Term Loan Agreement, 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.
default substantially consistent with those in the Existing
Credit Agreement, such as non-payment of obligations under the
Term Loan Agreement, 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 Amended and Restated Credit
Agreement is summary in nature and is qualified in its entirety
by reference to the Amended and Restated Credit Agreement, a copy
of which is attached hereto as Exhibit 10.2, and incorporated
herein by reference.
Agreement is summary in nature and is qualified in its entirety
by reference to the Amended and Restated Credit Agreement, a copy
of which is attached hereto as Exhibit 10.2, and incorporated
herein by reference.
>Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information provided in Item 1.01 of this Form 8-K is hereby
incorporated into this Item 2.03.
incorporated into this Item 2.03.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit Number
|
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10.1
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Term Loan Agreement, dated as of May 12, 2017, among
the Company, the lenders party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent. |
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10.2
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Amended and Restated Credit Agreement, dated as of May
12, 2017, among the Company, the subsidiary borrowers party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. |
About Tyson Foods, Inc. (NYSE:TSN)
Tyson Foods, Inc. is a food company, which is engaged in offering chicken, beef and pork, as well as prepared foods. The Company offers food products under Tyson, Jimmy Dean, Hillshire Farm, Sara Lee, Ball Park, Wright, Aidells and State Fair brands. The Company operates through four segments: Chicken, Beef, Pork and Prepared Foods. It operates a vertically integrated chicken production process, which consists of breeding stock, contract growers, feed production, processing, further-processing, marketing and transportation of chicken and related allied products, including animal and pet food ingredients. Through its subsidiary, Cobb-Vantress, Inc. (Cobb), the Company is engaged in supplying poultry breeding stock across the world. It produces a range of fresh, frozen and refrigerated food products. Its products are marketed and sold by its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores and military commissaries, among others. Tyson Foods, Inc. (NYSE:TSN) Recent Trading Information
Tyson Foods, Inc. (NYSE:TSN) closed its last trading session up +0.18 at 58.02 with 2,913,449 shares trading hands.
