Greif obtains $800 million revolver, $1.62 billion of term loans

By Rebecca Melvin

Concord, N.H., March 4 – Greif, Inc. and some subsidiaries, including Greif Packaging LLC, entered into a second amended and restated senior secured credit agreement on March 1 with JPMorgan Chase Bank NA as administrative agent, according to an 8-K filed with the Securities and Exchange Commission.

The facility provides an $800 million secured revolving credit facility consisting of a $725 million multicurrency facility and a $75 million U.S. dollar facility and $1,615,000,000 of term loans, including a $1.1 billion secured term loan A-1 facility and a $515 million secured term loan A-2 facility.

The company has an option to add $800 million of borrowings plus an amount equal to voluntary prepayments of term loans and voluntary permanent commitment reductions of the revolver, plus additional amounts subject to maintenance of a secured leverage ratio of 3 to 1 or less on a pro forma basis after giving effect to such incremental commitments.

The credit facility matures on March 1, 2027.

Interest is based on SOFR plus a credit spread adjustment which was not disclosed, based on the company’s leverage ratio. The agreement also includes a sustainability component whereby the margin can decrease upon achievement of certain sustainability performance metrics.

Borrowings were drawn at closing to redeem the company’s $500 million senior notes due 2027 and to repay and refinance all outstanding borrowings under the prior credit agreement. Going forward, borrowings will fund working capital, capital expenditures and general corporate purposes, including acquisitions.

The financial covenants require the company to maintain a certain leverage ratio and an interest coverage ratio. The leverage ratio generally requires that at the end of any fiscal quarter the company will not permit the ratio of total consolidated indebtedness to consolidated EBITDA to be greater than 4 to 1. The interest coverage ratio generally requires that at the end of any fiscal quarter the company will not permit the ratio of consolidated EBITDA to consolidated interest expense to be less than 3.00 to 1.

The lenders include Wells Fargo Securities, LLC, JPMorgan Chase Bank, BofA Securities, Inc., MUFG Bank, Ltd., U.S. Bank NA and TD Bank, NA as joint lead arrangers and joint bookrunners and CoBank, ACB as the term loan A-2 lead arranger.

Greif is a Delaware, Ohio-based industrial packaging company.

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