Dean Foods amended its credit agreement dated March 26, 2015 with Bank of America as administrative agent. The original agreement established a five-year senior secured revolving credit facility in a principal amount up to $450 million with an option to request an increase in the aggregate commitments under the facility by up to $200 million.

On January 4, 2017, the company and the subsidiary guarantors party amended the agreement to, among other things:

  • Extend the maturity date of the revolving credit facility to January 4, 2022
  • Modify the leverage ratio covenant to add a requirement that the company comply with a maximum total net leverage ratio not to exceed 4.25 to 1.00 and to eliminate the maximum senior secured net leverage ratio requirement
  • Modify certain negative covenants to provide additional flexibility for the incurrence of debt, the payment of dividends and the making of certain permitted acquisitions and other investments
  • Eliminate and release of all real property as collateral for loans under the revolving credit facility
  • Provide the company the ability to request increases in the aggregate commitments under the revolving credit facility be made available as either revolving loans or term loans

Concurrently, certain of Dean’s subsidiaries that are party to its $550 million receivables securitization facility, entered into a seventh amended and restated receivables purchase agreement with Rabobank, New York Branch, as agent, and PNC as L/C bank.

Terms modified by the first amendment include the following:

  • Extension of the liquidity termination date to January 4, 2022
  • Reduction in the maximum size of the receivables securitization facility to $450 million
  • Replacement of the senior secured net leverage ratio with a total net leverage ratio to be consistent with the amended leverage ratio covenant under the credit agreement described above
  • Modification of certain pricing terms such that advances outstanding under the receivables securitization facility will bear interest between 0.90% and 1.05% — the company will pay an unused fee between 0.40% and 0.55% on undrawn amounts, in each case based on the company’s total net leverage ratio