Summary
Church & Dwight Co., Inc. (CHD) filed an 8-K on November 19, 2010, reporting the entry into a new $500 million unsecured revolving credit facility, replacing its prior credit agreement. This new facility, set to mature on November 18, 2015, offers flexibility with the option to increase its size by an additional $500 million under certain conditions. The company also terminated its previous $400 million credit facility and repaid outstanding borrowings of $408 million using a combination of cash and its accounts receivable securitization facility.
Key Highlights
- 1Church & Dwight entered into a new $500 million unsecured revolving credit facility, effective November 18, 2010.
- 2The new credit facility replaces the company's previous credit agreement.
- 3The facility has a maturity date of November 18, 2015.
- 4There is an option to increase the credit facility size by up to an additional $500 million, subject to conditions.
- 5Interest rates are variable, based on the Base Rate or Eurocurrency Rate, with margins dependent on the company's leverage ratio.
- 6The company terminated its Amended and Restated Credit Agreement dated December 23, 2005.
- 7Outstanding borrowings of $408 million under the old agreement were repaid using $318 million in cash and $90 million from a securitization facility.
Frequently Asked Questions
The primary purpose of this 8-K filing is to announce Church & Dwight's entry into a new, larger revolving credit facility and the termination of its previous credit agreement. This provides transparency regarding the company's financing arrangements.
The new credit facility is an unsecured revolving credit facility totaling $500 million, with the potential to increase by another $500 million. This replaces the previous $400 million secured credit facility, which included both a revolving credit line and a term loan.
Church & Dwight repaid the $408 million outstanding under the old credit agreement by utilizing $318 million of its available cash and securing $90 million through its accounts receivable securitization facility.
The new credit facility includes covenants such as maintaining a minimum interest coverage ratio of 3.00 to 1.00 and keeping the leverage ratio below 3.25 to 1.00 (or 3.50 to 1.00 for twelve months following a material acquisition). It also contains customary restrictions on indebtedness, liens, investments, and asset dispositions.