Constellation Brands enters $4 billion amended, restated agreement

By Wendy Van Sickle

Columbus, Ohio, July 19 – Constellation Brands, Inc. entered into an amended and restated $4 billion credit agreement on July 14, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement consists of a refinanced and increased seven-year $500 million U.S. term A-1 loan; a new three-year $2 billion European term A loan that combines the previous European term A, term A-1 and term A-2 loans; and a five-year $1.5 billion revolving credit facility, up from $1.15 billion previously.

The new U.S. term A-1 loans bear interest of Libor plus a margin ranging from 150 basis points to 205 bps, depending on the company’s debt rating. The margin will reset after 3.5 years.

As with the previous U.S. term A-1 loans, these loans will be repaid in quarterly payments equal to 0.25% of the original principal amount with the balance due at the new maturity of July 14, 2024.

The new European term A facility has ratings-based interest of Libor plus 100 basis points to 175 bps.

It will be repaid in quarterly principal payments equal to 1.25% of the original principal amount, with the balance due at maturity on July 14, 2020.

The European borrowers include CIH International Sarl, CIH Holdings Sarl and CB International Finance Sarl.

The revolver has ratings-based interest of Libor plus 100 basis points to 175 bps. It has a $1.31 billion sublimit for the European borrowers.

At July 14, $348 million was drawn on the revolver.

The credit agreement’s joint lead arrangers and bookrunning managers are Bank of America Merrill Lynch, CoBank, ACB, Rabobank UA, New York Branch, Banco Bilbao Vizcaya Argentaria, SA New York Branch, Goldman Sachs Bank USA, JPMorgan Chase Bank, NA, Manufacturers and Traders Trust Co., Sumitomo Mitsui Banking Corp., Bank of Nova Scotia, MUFG and Wells Fargo Securities, LLC.

Bank of America NA is the administrative agent.

Co-syndication agents include CoBank, Rabobank, Banco Bilbao Vizcaya Argentaria, Goldman Sachs Bank USA, JPMorgan Chase, Manufactures and Traders Trust, Sumitomo Mitsui Banking, Bank of Nova Scotia, MUFG and Branch Banking and Trust.

Co-documentation agents are Branch Banking and Trust, Credit Suisse AG, Cayman Islands Branch, PNC Bank NA, SunTrust Bank and TD Bank, NA.

The amended and restated credit agreement also decreased the company’s maximum leverage ratio required for unlimited incremental term loans to 4.00 to 1.00 from 4.50 to 1.00. Otherwise the incremental facilities are capped at $750 million.

Proceeds may be used to refinance existing debt, working capital and general corporate purposes.

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

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