Kellogg obtains $1.5 billion revolver, $1 billion 364-day facility

By Sarah Lizee

Olympia, Wash., Feb. 2 – Kellogg Co. entered into an unsecured five-year credit agreement with JPMorgan Chase Bank, NA and 24 lenders on Tuesday, according to an 8-K filing with the Securities and Exchange Commission.

The agreement allows Kellogg to borrow on a revolving credit basis up to $1.5 billion, or the equivalent in other currencies, to obtain up to $75 million of letters of credit and to obtain up to $300 million of European swingline loans. The facility also provides a procedure for the lenders to bid on an uncommitted basis on Kellogg's short-term borrowings.

Borrowings bear interest at Libor plus a margin of 91.5 basis points to 140 bps and the facility fee ranges from 8.5 bps to 22.5 bps, depending on the company’s ratings.

In connection with the new facility, the company terminated its existing five-year credit agreement dated Feb. 28, 2014.

Additionally, Kellogg entered into an unsecured 364-day credit agreement on Tuesday with JPMorgan as administrative agent.

The new facility allows Kellogg to borrow up to $1 billion on a revolving credit basis.

Interest is Libor plus a margin of 94 bps to 147.5 bps and the facility fee ranges from 6 bps to 15 bps, depending on the company’s ratings.

In connection with the new agreement, the company terminated its existing 364-day credit agreement dated Jan. 31, 2017.

Both facilities require an interest expense coverage ratio that requires the company to maintain a minimum ratio of consolidated EBITDA to consolidated interest expense of 4 times any four consecutive fiscal quarters.

No borrowings were outstanding as of the closing date.

For both credit agreements, Barclays Bank plc is the syndication agent. Bank of America, NA, Citibank, NA, Cooperatieve Rabobank UA, New York Branch, Morgan Stanley MUFG Loan Partners, LLC and Wells Fargo Bank, NA are documentation agents. JPMorgan, Barclays, Merrill Lynch, Pierce, Fenner & Smith Inc., Citigroup Global Markets Inc., Cooperatieve Rabobank, Morgan Stanley MUFG and Wells Fargo Securities, LLC are joint lead arrangers and bookrunners.

The Battle Creek, Mich.-based company manufactures cereal and convenience foods.

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