01—Abstract
Summary
Summary of the 8-K filed April 18, 2025. Cited figures are marked; the original filing is the authoritative source.
Tyson Foods, Inc. entered into a new Revolving Credit Agreement dated April 15, 2025 with certain subsidiaries as subsidiary borrowers, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent.
The new facility refinanced and replaced the company's existing revolving credit agreement, which had provided for aggregate commitments of up to $2.25 billiona. The existing agreement and all its commitments were terminated effective upon entry into the new agreement. The new facility provides aggregate senior unsecured commitments of $2.5 billion, matures on April 15, 2030 with two one-year extension options, and includes an option to add up to $500 million in incremental commitments if certain conditions are met.
Interest is based on Term SOFR or Daily Simple SOFR plus an applicable spread, or the alternate base rate plus an applicable spread, and a facility fee applies to aggregate commitments. Pricing is tied to the company's corporate credit rating from S&P or Moody's, with facility fees ranging from 0.090%b to 0.200% and Term SOFR spreads from 0.785% to 1.175%. Covenants are generally consistent with the existing agreement and include limits on subsidiary indebtedness, liens, mergers, asset sales, and changes in lines of business, as well as a minimum interest expense coverage ratio (consolidated EBITDA to consolidated cash interest expense) of at least 3.50 to 1.0 measured quarterly on a trailing four-quarter basis.
Events of default are substantially consistent with the existing agreement. The full agreement is filed as Exhibit 10.1.
02—Key points
Key Highlights
- Tyson Foods entered a new $2.5 billion senior unsecured Revolving Credit Agreement on April 15, 2025, replacing its existing facility of up to $2.25 billion.
- The existing Revolving Credit Agreement, dated September 30, 2021 and amended November 9, 2022, was terminated upon entry into the new agreement.
- The new facility matures on April 15, 2030, with two one-year extension options.
- An accordion feature allows incremental commitments of up to $500 million in the aggregate if certain conditions are met.
- Pricing is grid-based on credit ratings: Term SOFR spreads range from 0.785% (Level 1, A3/A- or above) to 1.175% (Level 5, Ba1/BB+ or below).
- A minimum interest expense coverage ratio of at least 3.50 to 1.0, measured quarterly on a trailing four-quarter basis, is required, with additional EBITDA add-backs for certain taxes, losses and charges.
- Covenants and events of default are substantially consistent with those in the existing agreement, per the filing.
03—Questions
Frequently Asked Questions
What is the size and tenor of Tyson Foods' new revolving credit facility?
The new Revolving Credit Agreement provides aggregate senior unsecured commitments of $2.5 billion and matures on April 15, 2030, subject to two one-year extension options.
How does this facility compare to the one it replaced?
The existing Revolving Credit Agreement had provided for aggregate commitments of up to $2.25 billion. It was refinanced and replaced by the new agreement, and all commitments under it were terminated effective upon entry into the new agreement on April 15, 2025.
How is the cost of borrowing under the facility determined?
Borrowings accrue interest at either Term SOFR or Daily Simple SOFR plus an applicable spread, or the alternate base rate plus an applicable spread, at the company's option. A facility fee also applies based on aggregate commitments. The spreads and fees are set by the company's S&P or Moody's corporate credit rating, with facility fees from 0.090% to 0.200% and Term SOFR spreads from 0.785% to 1.175%.
What financial covenant must Tyson Foods maintain under the facility?
The company must maintain a minimum interest expense coverage ratio of at least 3.50 to 1.0 as of the end of each fiscal quarter, calculated on a trailing four fiscal quarter basis, where consolidated EBITDA is measured against consolidated cash interest expense as defined in the agreement.
Are there any changes to the facility's restrictions compared with the prior agreement?
The filing states that the covenants are generally consistent with those in the existing agreement, including limits on subsidiary indebtedness, liens, mergers and asset sales, and changes in lines of business. Events of default are substantially consistent as well. The full terms are in Exhibit 10.1.
04—Continue