Constellation Brands 8-K Report, Material Agreement (May 9, 2025)

On May 9, 2025, Constellation Brands, Inc. entered into a Term Loan Credit Agreement with Bank of America, N.A., as administrative agent, and certain other lenders.

The agreement provides a delayed draw term loan available in up to two draws for an aggregate principal amount of $500 million^a. If drawn, the company intends to use the proceeds for general corporate purposes, including repayment of indebtedness. Commitments terminate on the earliest of full draw or termination, the second funding date, or November 7, 2025, and the term loans mature two years after the initial borrowing.

The Term Loans bear interest at Term SOFR or Base Rate plus margins tied to the company's S&P or Moody's credit rating: 0.750%^b to 1.250% per annum for Term SOFR loans and 0.000% to 0.250% per annum for Base Rate loans. Unused commitments incur a ticking fee of 0.080% per annum, beginning 30 days after the Effective Date. The covenants are consistent with the company's Eleventh Amended and Restated Revolving Credit Agreement dated April 28, 2025, and include a minimum Consolidated Interest Coverage Ratio of 2.50:1.00 and a maximum Consolidated Net Leverage Ratio of 4.00:1.00, stepping up to 4.50:1.00 for the four fiscal quarters following a Material Acquisition.

The net leverage calculation is net of up to $750 million^c of unrestricted cash and cash equivalents. The filing also discloses that certain lenders and their affiliates have provided and may continue to provide banking and other services to the company, and that some lenders have credit facilities with Sands family investment vehicles, which are in some cases affiliates of the company. Those facilities are secured by pledges of Class A common stock of the company.