8-KMaterial AgreementsExhibits & Filings

CHURCH & DWIGHT CO INC /DE/ 8-K Report, Material Agreement (May 7, 2019)

Filed May 7, 2019For Securities:CHD

Summary

This 8-K filing by Church & Dwight Co., Inc. (CHD) details significant updates to its financing arrangements, primarily concerning a credit agreement amendment and a new term loan facility. The company amended its existing $1.0 billion unsecured revolving credit facility to extend its maturity date to March 29, 2024, and increased permitted accounts receivable dispositions. Additionally, CHD entered into a new $300 million unsecured term loan facility, the proceeds of which were used to partially finance the acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business. These financing adjustments indicate strategic moves by Church & Dwight to support its growth initiatives, including acquisitions. The extended credit facility provides continued operational flexibility and liquidity, while the new term loan directly supports the integration of a newly acquired business. Investors should note the details of the new debt, including interest rate mechanisms and covenants, as they pertain to the company's future financial obligations and leverage.

Key Highlights

  • 1Amended existing $1.0 billion unsecured revolving credit facility, extending maturity to March 29, 2024.
  • 2Increased permitted dispositions of accounts receivable from $150 million to $250 million under the revolving credit facility.
  • 3Entered into a new $300 million unsecured term loan facility.
  • 4The new term loan was used to partially fund the acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business.
  • 5The term loan has a maturity date of May 1, 2022, unless prepaid.
  • 6Interest on the term loan is based on Adjusted LIBOR or Base Rate plus an applicable margin, which is tied to the company's public corporate credit rating.
  • 7The term loan includes covenants, such as a maximum leverage ratio of 3.75:1.00 (or 4.25:1.00 post-acquisition).

Frequently Asked Questions

The Credit Agreement Amendment extends the maturity of the company's existing $1.0 billion revolving credit facility and allows for greater flexibility in disposing of accounts receivable. The new $300 million Term Credit Agreement was specifically entered into to provide partial funding for the recently announced acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business.

The term loan matures on May 1, 2022, unless prepaid. Interest accrues at a rate equal to the Adjusted LIBOR or Base Rate, plus an applicable margin that varies from 0% to 1.125% based on the company's credit rating. The agreement also contains covenants, including a maximum leverage ratio requirement.

Following the acquisition, the company is permitted to maintain a higher leverage ratio of up to 4.25 to 1.00 for a twelve-month period, compared to the standard 3.75 to 1.00 ratio. This provides some flexibility as the company integrates the new business.

This filing indicates the company is actively managing its debt structure to support strategic growth, particularly through acquisitions. The extension of the revolving credit facility provides ongoing liquidity and flexibility, while the new term loan directly finances a specific strategic investment, suggesting a balanced approach to leveraging for both operational needs and targeted expansion.