On May 31, 2019 (the “Closing Date”), US Foods, Inc. (“US Foods”) completed a refinancing of the asset backed senior secured revolving credit facility (the “Existing ABL Facility”) provided under that certain amended and restated ABL Credit Agreement, dated as of July 3, 2007 (as amended and restated, the “Existing ABL Credit Agreement”), by entering into an ABL Credit Agreement (the “New ABL Credit Agreement”) with a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent and collateral agent for the several lenders and issuing lenders party thereto.

The New ABL Credit Agreement provides US Foods with an asset backed senior secured revolving credit facility (the “New ABL Facility”) with commitments having a maximum aggregate principal amount of $1,700 million, comprised of (1) $1,400 million of commitments effective as of the Closing Date and (2) $300 million of commitments that may become effective, in whole or in part and in US Foods’ sole discretion, at any time on or prior to November 30, 2019, subject to, among other things, the consummation of the acquisition by US Foods of Services Group of America, Inc.’s (“SGA”) Food Group of Companies.

The aggregate amount of loans and letters of credit permitted to be made to, or issued for the account of, US Foods and certain of its subsidiaries party to the New ABL Credit Agreement (the “Borrowers”) under the New ABL Facility may not exceed the lesser of: (a) the aggregate amount of commitments and (b) a borrowing base equal to the sum of specified percentages of eligible accounts receivables, eligible inventory, eligible transportation equipment and certain unrestricted cash and cash equivalents, in each case, as described in the New ABL Credit Agreement. The New ABL Credit Agreement contains sub-facilities that permit US Foods to utilize up to $800 million of the New ABL Facility for the issuance of letters of credit and up to $170 million for swing line loans.

Borrowings under the New ABL Facility bear interest at a rate equal to the sum of an alternative base rate (“ABR”), as determined in accordance with the New ABL Credit Agreement, plus a margin ranging from 0.00% to 0.50%, or the sum of a London Interbank Offered Rate (“LIBOR”), as determined in accordance with the ABL Credit Agreement, plus a margin ranging from 1.00% to 1.50%, in each case, based on US Foods’ average excess availability under the New ABL Facility. The initial margin under the New ABL Facility is 0.25% for ABR loans and 1.25% for LIBOR loans. US Foods is also required to pay a commitment fee in respect of unused commitments under the New ABL Facility at a rate of 0.25% per annum.

The New ABL Facility is scheduled to mature on May 31, 2024, subject to a springing maturity date in the event that more than $300 million of aggregate principal amount of indebtedness under either US Foods’ senior secured term loan facility or senior notes due 2024 remains outstanding on a date that is 60 days prior to the maturity date for such senior secured term loan facility or senior notes, respectively. Amounts drawn on the New ABL Facility may be voluntarily prepaid without penalty or premium, other than customary breakage costs related to prepayments of LIBOR borrowings other than on the last day of an interest period.

The New ABL Facility is secured by certain designated receivables not pledged under US Foods’ accounts receivable financing facility (the “ABS Facility”), as well as inventory and certain transportation equipment owned by the Company. Additionally, lenders under the New ABL Facility have a second priority interest in all of the capital stock of US Foods and its domestic subsidiaries, as defined in the New ABL Credit Agreement, and substantially all other non-real estate assets of US Foods and its subsidiaries not pledged under the ABS Facility.

The New ABL Credit Agreement contains customary covenants for facilities of this type, including, among other things, covenants that restrict US Foods’ ability to pay dividends or engage in mergers or consolidations. The New ABL Credit Agreement also contains customary events of default, including, among other things, the failure to pay principal when due or interest or other amounts after a five-day grace period, cross default provisions, the failure of representations and warranties contained in the agreements to be true in all material respects when made or deemed made, and certain insolvency events. If an event of default occurs and remains uncured, principal amounts then outstanding under the New ABL Credit Agreement, together with all accrued unpaid interest and any other amounts owed, may be declared immediately due and payable and the commitments made under the New ABL Facility may be terminated.

A copy of the New ABL Credit Agreement is attached as Exhibit 10.1 and is incorporated by reference herein. The foregoing description of the New ABL Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document.

On the Closing Date, US Foods repaid in full and terminated the Existing ABL Facility under the Existing ABL Credit Agreement as more specifically described in Item 1.01, which description is incorporated by reference into this Item 1.02.

The disclosure set forth in Item 1.01 is incorporated by reference into this Item 2.03.

(d) Exhibits

US Foods Holding Corp. Exhibit
EX-10.1 2 ex10-1.htm CREDIT AGREEMENT Exhibit 10.1   ABL CREDIT AGREEMENT among US FOODS,…
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About US FOODS HOLDING CORP. (NYSE:USFD)

US Foods Holding Corp. is a holding company. The Company is a foodservice distributor in the United States. It conducts all of its operations through its subsidiary, US Foods, Inc. It markets and distributes fresh, frozen and dry food and non-food products to foodservice customers throughout the United States. It offers products, such as Chef’s Line Pat LaFrieda Angus Beef Burger, which is a beef patty developed by New York butcher Pat LaFrieda, and features Angus short rib and chuck prepared with LaFrieda’s chopped technology; Chef’s Line All Natural Ready-to-Cook Turkey Roast, which is a natural turkey breast developed with Butterball and DuPont Film, and Monarch Mirepoix Blend, which is a blend of onions, carrots and celery. As of October 1, 2016, it provided over 400,000 fresh, frozen, and dry food stock-keeping units, as well as non-food items, sourced from over 5,000 suppliers. The Company offers its customers with a suite of e-commerce, technology and business solutions.