Chiquita amends credit agreement to give flexibility, allow strategy

By Toni Weeks

San Diego, June 26 - Chiquita Brands International, Inc. and subsidiary Chiquita Brands LLC entered into an amended and restated credit agreement on June 26, according to an 8-K filing with the Securities and Exchange Commission.

The amended facility maintains the $330 million senior secured term loan and $150 million senior secured revolving facility, both due either on July 26, 2016, or on May 1, 2014 if the company does not repay, refinance or extend the maturity of its 7½% senior notes due 2014 by then.

For the period during which the subsidiary's leverage ratio is greater than 3.50 to 1.0 or the fixed-charge coverage ratio is less than 1.15 to 1.0, the term loan and revolver will bear interest at Libor plus 475 basis points, the letter of credit fee is 475 bps, and the commitment fee on the daily unused portions of the revolver is 75 bps.

After the quarter ending Sept. 30, 2013, the covenants revert to the prior leverage ratio of no higher than 3.50 to 1.0 and a fixed-charge coverage ratio of at least 1.15 to 1.0.

During the covenant amendment period, the limits on capital expenditures are $125 million for fiscal year 2012, $85 million for fiscal year 2013 and $150 million per year thereafter, plus carryovers from the prior year. The subsidiary must have available liquidity during the covenant amendment period of $50 million and is subject to limits on debt prepayments, acquisitions, investments and distributions.

The company amended its credit facility to provide the appropriate level of flexibility, execute the company's strategy and absorb the current volatility inherent in its business, the filing noted.

The lenders were led by Cooperatieve Centrale Raiffeisen - Boerenleenbank BA, Rabobank Nederland, New York branch acting as administrative agent.

Cincinnati-based Chiquita is a producer and distributor of bananas and other produce.

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