Tupperware Brands, a consumer products company, entered into a second amendment to its credit agreement dated as of Nov. 23, 2021. The company entered a first amendment to the agreement on Aug. 1, 2022. According to an 8K filed with the SEC, Wells Fargo is the administrative agent for the agreement.
The second amendment, among other things, increases the maximum permitted consolidated net leverage ratio for the company’s current fiscal quarter to allow the company more financial flexibility with which to further implement its ongoing turnaround plan.
Highlights of the Second Amendment
- Increases the maximum permitted consolidated net leverage ratio for the fiscal quarter ending Dec. 31 to 5.25 to 1.00 (from 4.25 to 1.00), with the maximum permitted consolidated net leverage ratio reducing to 4.25 to 1.00 for the first fiscal quarter ending in calendar year 2023 and 3.75 to 1.00 for each fiscal quarter ending thereafter
- Shortens the maturity date of the credit agreement from Nov. 23, 2026, to Nov. 23, 2025
- Reduces the maximum amount that may be borrowed under the global tranche revolving commitments (together with letters of credit and sublimit borrowings) from $450 million to $435 million and reduces the maximum sublimit for letters of credit from $50 million to $45 million, with each such reduction expiring on the date on which the company delivers financial statements for the fiscal quarter ending on or about Dec. 31, 2023, demonstrating compliance with financial covenants
- Eliminates each of the $15 million Singaporean tranche revolving commitments and the incremental facility and reduces the Mexican tranche revolving commitments from $15 million to $5 million
- Increases the applicable margin on borrowings under the facility while the company has a consolidated leverage ratio of greater than or equal to 4.00 to 1.00, including an applicable margin for base rate loans (loans denominated in U.S. dollars) of:_x000D_
- 25 where the consolidated leverage ratio is greater than or equal to 4.00 to 1.00 but less than 4.50 to 1.00
- 75 where the consolidated leverage ratio is greater than or equal to 4.50 to 1.00 but less than 5.00 to 1.00
- 25 where the consolidated leverage ratio is greater than or equal to 5.00 to 1.00 but less than 5.25 to 1.00
- 75 where the consolidated leverage ratio is greater than or equal to 5.25 to 1.00
_x000D_
_x000D_
_x000D_
_x000D_
- Creates additional reporting requirements, account control agreement requirements and other requirements and restrictions
_x000D_
_x000D_
_x000D_
_x000D_
_x000D_
Tupperware Brands remains in discussions with its lending group regarding potential additional covenant relief for future fiscal periods and to provide for appropriate flexibility under its covenants to allow management to implement its strategic plans.
“This amended agreement allows us to continue to execute on our dual strategies of fixing the core and expanding access to the brand during this period of unusual macroeconomic volatility,” Mariela Matute, CFO of Tupperware Brands, said. “We remain confident that our strategies are the right ones for Tupperware in today’s global consumer environment, and we appreciate the support of our lenders.”
