Hershey enters $1.5 billion 364-day revolving credit agreement

By Marisa Wong

Morgantown, W.Va., Jan. 9 – Hershey Co. entered into a 364-day credit agreement on Monday for a $1.5 billion unsecured revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Citigroup Global Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith Inc. are the joint lead arrangers and joint bookrunners with Citibank, NA as lender and administrative agent, Bank of America, NA as syndication agent and lender and Royal Bank of Canada as documentation agent and lender.

Interest is equal to Libor plus 59.5 basis points to 100.5 bps, depending on ratings.

Funds borrowed may be used for general corporate purposes, including commercial paper backstop and acquisitions. Advances other than competitive bid advances may be repaid without penalty at any time prior to the last day of the credit agreement. Competitive bid advances cannot be prepaid and must be paid at maturity.

The credit agreement contains a financial covenant requiring the company to maintain a ratio of (a) pre-tax income from continuing operations for the most recent four fiscal quarters to (b) consolidated interest expense for the most recent four fiscal quarters of not less than 2.0 to 1.0 at the end of each fiscal quarter.

The maker of chocolate and confectionery products is based in Hershey, Pa.

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