8-KMaterial AgreementsExhibits & Filings

CHURCH & DWIGHT CO INC /DE/ 8-K Report, Material Agreement (Dec 22, 2014)

Filed December 22, 2014For Securities:CHD

Summary

On December 19, 2014, Church & Dwight Co., Inc. (CHD) announced the execution of a new $600 million unsecured revolving credit facility, replacing its previous credit agreement from 2010. This new facility, which matures on December 19, 2019, offers significant financial flexibility by allowing the company to potentially increase its borrowing capacity by an additional $500 million under certain conditions. The terms provide for interest rates based on LIBOR or a Base Rate, with applicable margins tied to the company's corporate credit rating, reflecting a dynamic cost of borrowing that rewards strong financial health. The agreement includes standard covenants, such as restrictions on liens, investments, and asset dispositions, alongside a key financial maintenance covenant requiring the leverage ratio (Consolidated Funded Indebtedness to EBITDA) to not exceed 3.50:1.00 (or 3.75:1.00 following a material acquisition). This new credit facility demonstrates the company's proactive approach to managing its capital structure and ensuring access to liquidity, which is crucial for supporting ongoing operations and potential future growth initiatives. The termination of the prior $500 million facility was a direct consequence of entering into this more robust arrangement.

Key Highlights

  • 1Church & Dwight entered into a new $600 million unsecured revolving credit facility, replacing its prior credit agreement.
  • 2The new credit facility has a maturity date of December 19, 2019.
  • 3The company has the option to increase the facility size by up to an additional $500 million, subject to lender commitments.
  • 4Interest rates are variable, based on Adjusted LIBOR or a Base Rate, plus an applicable margin determined by the corporate credit rating.
  • 5A leverage ratio covenant requires Consolidated Funded Indebtedness to EBITDA to be no greater than 3.50:1.00 (or 3.75:1.00 after a material acquisition).
  • 6 customary affirmative and negative covenants are included, restricting activities such as liens, investments, and asset dispositions.
  • 7The prior $500 million credit agreement dated November 18, 2010, was terminated concurrently with the execution of the new agreement.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce the execution of a new material definitive agreement, specifically a new credit facility, and the termination of a previous credit agreement.

The new credit facility provides an initial borrowing capacity of $600 million. It also includes an option for the company to increase this capacity by up to an additional $500 million, subject to receiving additional lender commitments.

A significant financial covenant requires Church & Dwight to maintain a leverage ratio (Consolidated Funded Indebtedness to EBITDA) at or below 3.50 to 1.00. This ratio can be temporarily increased to 3.75 to 1.00 if the company has completed a material acquisition during the relevant period.

The company's Amended and Restated Credit Agreement from November 18, 2010, which provided for a $500 million revolving credit facility, was terminated on December 19, 2014, in conjunction with entering into the new credit agreement. All outstanding amounts under the old agreement were repaid.