Sprouts Farmers Market closed a $700 million revolving credit facility under a credit agreement dated as of March 25. The revolving credit facility and credit agreement refinances the company’s previously existing $700 million revolving credit facility, which was repaid and terminated in connection with Sprouts’ entry into this new credit agreement. The credit agreement contains terms and conditions substantially similar to the previously existing credit agreement, with a commitment expiration date of March 2027 and the addition of sustainability-linked pricing terms, revised pricing terms for loans and commitments thereunder and additional covenant flexibility. A portion of the pricing for loans and commitments under the revolving credit facility will be based on Sprouts’ performance in two sustainability-linked areas – board of director diversity and sales of socially and environmentally sustainable products. At closing, Sprouts had outstanding total borrowings of $250 million and letters of credit of $32 million outstanding under the revolving credit facility, with a remaining availability of $418 million under the revolving credit facility.
“While we plan to continue to fund operations and unit growth through our robust cash flow generation, this facility provides Sprouts with greater financial flexibility as we grow,” Chip Molloy, chief financial officer of Sprouts, said. “As well, linking our credit agreement to sustainability objectives supports our “doing well by doing good” philosophy.”
Bank of America acted as administrative agent, issuing bank and swingline lender for the facility, while J. P. Morgan Securities acted as sustainability structuring agent; BMO Capital Markets, JPMorgan Chase Bank and Wells Fargo Securities acted as syndication agents; Truist Bank and PNC Bank acted as documentation agents; and BofA Securities, BMO Capital Markets, JPMorgan Chase Bank and Wells Fargo Securities acted as joint bookrunners and joint lead arrangers.
