01—Abstract
Summary
Summary of the 8-K filed October 3, 2024. Cited figures are marked; the original filing is the authoritative source.
On October 3, 2024, US Foods, Inc. entered into a Thirteenth Amendment to its Amended and Restated Term Loan Credit Agreement, adding two new senior secured term loan tranches: $610 milliona of 2024 Repriced Term Loans maturing November 22, 2028, and $725 million of 2024 Replacement Term Loans maturing October 3, 2031.
Proceeds from these loans, along with net proceeds from the notes offering and cash on hand, were used to repay in full the company's existing term loans due September 13, 2026, and to repay existing term loans due November 22, 2028, other than amounts rolled on a cashless basis into the 2024 Repriced Term Loans, as well as to pay related fees and expenses. The new term loans bear interest at Term SOFR plus 1.75% or an alternative base rate plus 0.75%, and are guaranteed and secured by the company's capital stock and substantially all non-real estate assets of the company and certain subsidiaries. On the same date, the company completed its offering of $500 millionb aggregate principal amount of 5.750% Senior Notes due April 15, 2033, issued under an indenture with Wilmington Trust, National Association, as trustee.
The notes are unconditionally guaranteed on a senior unsecured basis by the company's wholly-owned domestic subsidiaries that guarantee its senior secured term loan facilities. The notes may be redeemed at a make-whole premium before October 15, 2027, and at specified redemption prices thereafter. Upon a Change of Control Triggering Event, the company must offer to repurchase the notes at 101%c of principal plus accrued interest.
The indenture and credit agreement both contain customary covenants and events of default. The transactions primarily refinance and extend the maturities of existing term debt. The filing does not describe any change in the company's operations, and the notes have not been registered under the Securities Act of 1933.
02—Key points
Key Highlights
- New $610 million 2024 Repriced Term Loans maturing November 22, 2028, bearing interest at Term SOFR plus 1.75% or alternative base rate plus 0.75%
- New $725 million 2024 Replacement Term Loans maturing October 3, 2031, amortizing in equal quarterly installments at 1% per annum of original principal
- Proceeds used to repay in full existing term loans due September 13, 2026, and to repay existing term loans due November 22, 2028 (other than amounts rolled into the repriced tranche), plus fees and expenses
- Completed offering of $500 million 5.750% Senior Notes due April 15, 2033, with interest payable semi-annually beginning April 15, 2025
- Notes are guaranteed on a senior unsecured basis by wholly-owned domestic subsidiaries that guarantee the senior secured term loan facilities
- Notes may be redeemed at a make-whole premium before October 15, 2027, and up to 40.0% may be redeemed with certain equity offering proceeds at 105.750% of principal
- A 101% change of control repurchase offer applies, and a 1.00% prepayment premium applies to any repricing transaction within six months of the closing date
03—Questions
Frequently Asked Questions
What new debt did US Foods, Inc. take on in October 2024?
The company entered into a Thirteenth Amendment to its term loan credit agreement providing $610 million of 2024 Repriced Term Loans due November 22, 2028, and $725 million of 2024 Replacement Term Loans due October 3, 2031. It also completed a $500 million offering of 5.750% Senior Notes due 2033.
How will the proceeds from the new financings be used?
Borrowings under the new term loans, net proceeds from the notes offering, and cash on hand were used to repay in full the existing term loans maturing September 13, 2026, and to repay existing term loans maturing November 22, 2028, except amounts rolled on a cashless basis into the 2024 Repriced Term Loans. Proceeds also covered related fees and expenses.
What is the interest cost of the new term loans?
Borrowings bear interest at either Term SOFR plus a 1.75% margin or an alternative base rate plus a 0.75% margin, at the company's option.
Can the new debt be prepaid, and are there penalties?
Borrowings under the new term loans may be voluntarily prepaid without penalty or premium, except for customary breakage costs on SOFR-based prepayments and a 1.00% prepayment premium for any repricing transaction within six months of the closing date.
What protections do noteholders have if the company undergoes a change of control?
If a Change of Control Triggering Event occurs, the company must offer to repurchase the Notes at 101% of their principal amount, plus accrued and unpaid interest to the repurchase date.
04—Continue