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Whole Foods gets $500 million revolver, plans up to $1 billion of debt
By Marisa Wong
Morgantown, W.Va., Nov. 4 – Whole Foods Market, Inc. entered into a new $500 million unsecured revolving credit facility on Monday with JPMorgan Chase Bank, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.
The revolver may be increased from time to time by up to $250 million.
The credit agreement also provides for an up to $250 million letter-of-credit subfacility and an up to $50 million swingline subfacility.
The facility will mature on Nov. 2, 2020.
Borrowings will bear interest at Libor plus a margin of 112.5 basis points to 175 bps, based on the company’s leverage ratio.
The company will also pay a commitment fee ranging from 12.5 basis points to 30 bps, again based on the leverage ratio.
In addition, the credit agreement requires the company to maintain a total leverage ratio of not more than 3.00 to 1.00 as of the end of each fiscal quarter and a minimum coverage ratio of at least 1.50 to 1.00 as of the end of each fiscal quarter.
New debt
In addition, the company plans to incur up to $1 billion of additional long-term debt by the end of the fiscal first quarter in December.
The amount and composition of this debt will depend on market conditions and capital allocation considerations at the time the debt is incurred.
The company said it may also incur up to $350 million of additional short-term debt, which would be repaid with proceeds from the long-term debt.
Proceeds from any debt incurred would be used for general corporate purposes, including the repurchase of stock.
The company's board of directors authorized a new $1 billion share repurchase program. The company’s intent is to spend the majority of the $1 billion buyback authorization in the first half of the fiscal year.
The natural and organic foods supermarket is based in Austin, Texas.
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