Summary
Cintas Corporation (CTAS) announced the execution of a Third Amended and Restated Credit Agreement on March 23, 2022, establishing a new $2,000 million revolving credit facility. This facility replaces prior credit arrangements and features a letter of credit sub-facility of up to $300 million and a swing line sub-facility of up to $150 million. The new credit facility matures on March 23, 2027, providing the company with significant financial flexibility and access to capital for at least the next five years. The agreement includes provisions for increasing commitments or adding new term loan facilities, subject to certain conditions, up to an additional $500 million. The interest rate structure is tied to SOFR or a Base Rate, with applicable margins. The credit agreement also imposes customary covenants on Cintas No. 2, the Corporation, and its guarantors, including limitations on liens, asset sales, and affiliate transactions, along with key financial covenants such as leverage and interest coverage ratios. The company also furnished a press release detailing its financial results for the quarter ended February 28, 2022.
Key Highlights
- 1Cintas entered into a new $2,000 million revolving credit facility maturing in March 2027.
- 2The facility replaces existing credit arrangements, indicating a refinancing or upgrade of its debt structure.
- 3It includes a $300 million letter of credit sub-facility and a $150 million swing line sub-facility.
- 4The company has the option to increase revolving commitments or add new term loan facilities up to an additional $500 million.
- 5Interest rates are variable, based on SOFR or Base Rate, plus an applicable margin.
- 6The agreement includes standard financial covenants, such as maintaining a leverage ratio below 3.50:1.00 and an interest coverage ratio of at least 3.00:1.00.
- 7The filing also incorporated by reference a press release on Cintas's financial results for the quarter ended February 28, 2022.