CHS signs revolving credit agreement for $2.8 billion; amends term loan

By Mary-Katherine Stinson

Lexington, Ky., April 25 – CHS Inc. separately amended a revolving credit agreement and a term loan, both with CoBank, ACB as administrative agent, on April 21, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into a third amended and restated credit agreement providing for a committed revolving credit facility totaling $2.8 billion subject to an increase option to a commitment amount up to $3.5 billion.

The agreement expires April 21, 2028 with up to two optional one-year extensions.

It includes a letter-of-credit facility of up to $200 million. Any outstanding letters of credit decreases the available commitment under the revolving agreement.

The revolver bears interest at SOFR plus a margin ranging between 100 basis points and 155 bps based on the company's ratio of consolidated funded debt to consolidated cash flow.

The company is required to pay certain fees including a facility fee, on drawn and undrawn committed amounts, in connection with the 2023 revolving agreement. As of April 21, the facility is undrawn.

Financial covenants require the company to have a consolidated net worth equal to or greater than $4 billion at the end of each fiscal quarter, to have a ratio of consolidated funded debt divided by consolidated cash flow measured on the previous consecutive four fiscal quarters of no greater than 3.5x and to not permit the ratio of adjusted consolidated funded debt to consolidated net worth to exceed 0.8x as measured at the end of each fiscal quarter. The company and its consolidated subsidiaries are restricted from creating or incurring any priority debt if the total outstanding principal amount exceeds 20% of the company's consolidated net worth.

The proceeds of the loans under the revolver will be used to fund working capital requirements, for general corporate purposes including funding capital expenditures, to support letters of credit issuances and to pay off swingline advances made pursuant to the revolver.

Sumitomo Mitsui Banking Corp. and Cooperatieve Rabobank UA, New York Branch are the syndication agents.

The amended revolving agreement amends and restates the company’s 2019 revolving facility which provided for a $2.75 billion committed credit facility, subject to an increase up to $3.45 billion. It was set to expire July 16, 2024.

Also, on April 21 the company entered into a fourth amendment to its 2015 term loan agreement dated Sept. 4, 2015 to amend certain definitions, representations and warranties, covenants, events of default and other provisions to correspond to those included in the revolving agreement.

CHS is an Inver Grove Heights, Minn.-based integrated agricultural company.

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