Mosaic gets $2.5 billion five-year replacement revolving facility

By Marisa Wong

Los Angeles, Aug. 23 – Mosaic Co. entered into an up to $2.5 billion unsecured committed revolving credit facility on Aug. 19 with Bank of America, NA as administrative agent, swingline lender and letter-of-credit issuer, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility includes an up to $75 million sublimit for swingline loans and an up to $150 million sublimit for letters of credit.

The maturity date is Aug. 19, 2026.

The credit facility replaces a prior unsecured credit facility entered into on Nov. 16, 2016 that consisted of an up to $2.2 billion revolver.

Compared to the prior facility, the new facility increases the amount available under the revolver to $2.5 billion, reduces commitment fees and grants the company additional flexibility under restrictive covenants.

Letters of credit outstanding under the prior facility in the amount of $11.8 million became letters of credit under the new facility and utilize a portion of the amount available for revolving loans under the new facility. Other than letters of credit, no borrowings had been made under the prior facility.

As of Aug. 19, no borrowings are outstanding under the new facility, and the net amount available for borrowing is roughly $2.49 billion.

Borrowings generally bear interest at Libor plus an applicable margin of 100 basis points to 200 bps, depending on ratings. The applicable margin is initially 112.5 bps.

The commitment fee ranges from 12.5 bps to 30 bps, also based on ratings. The commitment fee is currently 15 bps.

The credit facility requires the company to maintain some financial ratios, including a ratio of consolidated indebtedness to consolidated capitalization of no greater than 0.65 to 1.0 (increased to 0.70 to 1.0 for four quarters following acquisitions), as well as a minimum interest coverage ratio of not less than 3.0 to 1.0.

Proceeds may be used for working capital, capital expenditures, dividends, share repurchases, acquisitions and other corporate purposes.

BofA Securities, Inc., Wells Fargo Securities, LLC, CoBank, ACB, U.S. Bank NA, BMO Capital Markets Corp., BNP Paribas Securities Corp., JPMorgan Chase Bank, NA, MUFG Bank, Ltd., PNC Capital Markets LLC, Bank of Nova Scotia and Citibank, NA are the joint lead arrangers and joint bookrunners. Wells Fargo Bank, NA and CoBank are the co-syndication agents.

Mosaic is a Tampa, Fla.-based maker of agricultural chemicals.

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