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Constellation Brands lifts revolver to $1.15 billion, adds term loans
By Marisa Wong
Madison, Wis., July 16 – Constellation Brands, Inc. said it amended its senior credit facility to increase its existing revolving credit facility by $300 million to $1.15 billion.
The amendment also adds a $1.27 billion U.S. term A loan, which combines and increases the company’s U.S. term A and term A-2 loan facilities by $200 million.
In addition, the amendment adds a $1.43 billion European term A loan, which combines the existing European term A loan and term B-1 loans.
The maturity date of these facilities will be extended to July 16, 2020.
The U.S. term A-1 loan facility amount of $241.9 million remains the same with an extended maturity of July 16, 2021, according to a press release.
The amendment provides for a reduction in borrowing rates and modifies some financial and other covenants and includes the suspension of collateral and other covenants if the company receives an investment-grade rating from both Standard & Poor’s and Moody’s Investors Service.
The revolver remains undrawn.
Proceeds from the increase in the U.S. term A loan are expected to be used to fund a portion of Constellation’s recently announced acquisition of the Meiomi wine brand.
“Given the recent growth in our business and favorable market conditions, it is an opportune time for us to appropriately size our credit agreement to provide future financial flexibility,” David Klein, chief financial officer, said in the release.
“The amended credit agreement and our expected strong operating cash flow generation should provide ample liquidity for Constellation’s anticipated capital needs into the foreseeable future. Our goal is to continue to target a leverage ratio of three to four times debt to comparable basis EBITDA.”
Constellation is a Victor, N.Y.-based producer and marketer of beer, wine and spirits.
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