Constellation Brands amends and restates credit facilities

By Mary-Katherine Stinson

Lexington, Ky., April 18 – Constellation Brands, Inc. and its wholly owned subsidiary CB International Finance Sarl amended and restated its credit agreement from March 26, 2020 and amended a term loan agreement from the same date, both with Bank of America, NA as administrative agent, on April 14.

The first agreement, the amended and restated agreement, was amended and restated to upsize its total commitments to $2.5 billion from $2 billion and extend the maturity date of the agreement to April 14, 2027.

For both agreements, the amendments were similar, and pertain to each credit agreement.

There has been an increase of the swingline sublimit to $75 million from $50 million.

The benchmark rate will now be SOFR instead of Libor.

There has been an increase in the permitted cash netting to up to $750 million of cash and cash equivalents from up to $500 million for purposes of calculating the consolidated net leverage ratio of 4x, or 4.5 following a material acquisition.

The amendments also consolidate certain baskets for CB International Finance’s debt into the general debt basket and increase it to an amount not to exceed 10% of consolidated assets from an amount not to exceed $250 million.

Additionally, each amendment consolidates certain basket for liens into the general liens baskets and increases it to an amount not to exceed 7.5% of assets from an amount not to exceed $250 million.

The applicable rates are based on debt ratings. For the amended and restated agreement, the commitment fee starts at 7 basis points and tops out at 20 bps.

The margin above SOFR for borrowings is 87.5 bps to 150 bps.

For the term loan, the rate is SOFR plus 75 bps to 137.5 bps.

For the first amended and restated agreement, Bank of America NA, Banco Bilbao Vizcaya Argentina SA, New York Branch, Bank of Montreal, Goldman Sachs Bank USA, JPMorgan Chase Bank NA, Manufacturers and Traders Trust Co., MUFG Bank Ltd., PNC Bank NA, Bank of Nova Scotia, BNP Paribas, Bank of the West, Toronto-Dominion Bank, Truist Bank and Wells Fargo Bank NA are the joint lead arrangers and joint bookrunning managers

Except for BofA, the same banks and co-syndication agents.

Cooperative Rabobank UA, New York Branch and Fifth Third Bank, NA are the co-documentation agents.

BofA Securities, Inc. is the sole lead arranger and bookrunner for the term loan agreement.

Constellation Brands is a Victor, N.Y.-based producer, importer and distributor of beer, wine and liquor.

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