SunOpta enters $180 million term loan, $85 million revolver

By Marisa Wong

Los Angeles, Dec. 14 – SunOpta Inc. and some subsidiaries entered into a new $180 million five-year term loan credit facility and a new $85 million five-year revolving credit facility on Dec. 8, according to an 8-K filing with the Securities and Exchange Commission.

The borrower may request increases to the commitments and loans under the new credit facility or commitments and loans in respect of a new term loan facility in an amount of up to (i) the greater of $77.5 million and 100% of consolidated EBITDA as of the most recently ended four fiscal quarter period for which financials have been delivered, plus (ii) amounts equal to certain repayments and commitment reductions, plus (iii) an unlimited amount subject to pro forma compliance with a consolidated total net leverage ratio of 2.5x.

Borrowings may be made in U.S. dollars, Canadian dollars and other currencies.

The revolver includes borrowing capacity available for letters of credit and provide for borrowings on same-day notice including in the form of swingline loans.

Borrowings will bear interest at term SOFR plus a margin ranging from 200 basis points to 325 bps, based on the consolidated total net leverage ratio for the preceding fiscal quarter. The initial margin is 275 bps.

In addition, the borrower is required to pay an undrawn fee under the revolver ranging from 20 bps to 40 bps, based on the consolidated total net leverage ratio for the preceding fiscal quarter.

The company and its restricted subsidiaries are required to maintain a minimum fixed-charge coverage ratio of 1.2x as of the end of each quarterly test period. The company and its subsidiaries are also required to maintain a maximum consolidated total net leverage ratio of, for each quarterly test period ending prior to Dec. 31, 2024, 4x; for each quarterly test period ending from Dec. 31, 2024 through the test period ending Sept. 30, 2025, 3.75x; and for each quarterly test period ending Dec. 31, 2025 thereafter, 3.5x. However, if the borrower or any of its restricted subsidiaries completes an acquisition for consideration in excess of $50 million in any quarterly test period, then the maximum consolidated total net leverage ratio may, at the election of the borrower (on no more than two occasions), be increased to the lesser of (i) 4.25x and (ii) the then applicable maximum consolidated leverage ratio plus 0.5x, for the end of the four succeeding quarterly test periods.

At closing, the company had borrowed a total of $210 million under the new facilities, comprising $180 million borrowed under the term loan and $30 million under the revolver.

Proceeds were used on the closing date to repay in full the amounts due under the company’s amended and restated credit agreement dated Dec. 31, 2020 and to repay and terminate some capital lease obligations.

BofA Securities, Inc. and JPMorgan Chase Bank, NA were the joint lead arrangers and joint bookrunners, with JPMorgan as syndication agent. Bank of America, NA is the administrative agent, collateral agent and issuing bank.

SunOpta is an organic, natural and non-GMO food and mineral company based in Eden Prairie, Minn.

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