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Constellation Brands subsidiary gets $400 million European term loan
By Angela McDaniels
Tacoma, Wash., Oct. 18 – Constellation Brands, Inc. amended and restated its credit agreement on Thursday to create a new $400 million European term loan A-2 with subsidiary CIH International Sarl as the borrower, according to an 8-K filing with the Securities and Exchange Commission.
The loan requires 1.25% quarterly amortization payments and will mature March 10, 2021.
The interest rate is Libor plus a margin that ranges from 125 basis points to 225 bps based on the company’s leverage ratio.
Also as part of the amendment and restatement, the incremental facilities cap was changed from a fixed dollar cap of $750 million to a flexible cap of $750 million plus an unlimited amount so long as the company’s leverage ratio is no greater than 4.5 to 1.0.
Some baskets and thresholds contained in exceptions to some of the negative covenants were increased or modified by the restatement agreement.
Finally, CB International Finance Sarl was added as a new borrower under the European revolving credit facility.
The amount that CIH International, CIH Holdings Sarl and CB International Finance may borrow under the European revolver remains $1 billion.
The credit agreement provides for up to $1.15 billion of revolvers.
The interest rate on the revolvers is the same as that on the new term loan.
As of Monday, none of the borrowers had any outstanding revolving credit loans under the credit agreement.
The facilities are guaranteed by Constellation Brands and some of its U.S. subsidiaries.
Bank of America, NA is the administrative agent.
Constellation Brands is a Victor, N.Y.-based producer, importer and distributor of beer, wine and liquor.
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