Lancaster Colony Corporation Enters into a New $150 Million Credit Agreement with the Lenders Named in the New Credit Agreement and JPMorgan Chase Bank
March 20, 2020 at 10:17 pm IST
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On March 19, 2020, Lancaster Colony Corporation entered into a new $150 million credit agreement with the Lenders named in the New Credit Agreement and JPMorgan Chase Bank, N.A. as Administrative Agent. All capitalized terms not otherwise defined herein are defined in the New Credit Agreement. On March 19, 2020, upon execution of the New Credit Agreement, the Company entered into an agreement with JPMorgan Chase Bank, N.A. to terminate its existing $150 million credit agreement (the “Old Credit Agreement”) dated April 8, 2016, as amended, between the Company, the Lenders party thereto (as defined in the Old Credit Agreement), and JPMorgan Chase Bank, N.A. as Administrative Agent. The Old Credit Agreement was replaced by the New Credit Agreement. The material terms of the New Credit Agreement are substantially similar to the terms of the Old Credit Agreement. The New Credit Agreement provides that the Company may borrow, for the five-year term of the agreement, on a revolving credit basis, up to a maximum of $150 million at any one time, with potential to expand the total credit availability to $225 million based on consent of the issuing banks and certain other conditions. All outstanding amounts under the New Credit Agreement are due and payable on March 19, 2025. Interest is variable based upon formulas tied to LIBOR or an Alternate Base Rate. The Company must also pay facility fees that are tied to its then-applicable consolidated leverage ratio. Loans may be used for general corporate purposes. The Company’s obligations under the New Credit Agreement are not secured. The New Credit Agreement contains certain restrictive covenants, including limitations on indebtedness, asset sales and acquisitions. There are two principal financial covenants: an interest expense test that requires the Company to maintain an interest coverage ratio not less than 2.5 to 1 at the end of each fiscal quarter; and an indebtedness test that requires the Company to maintain a consolidated leverage ratio not greater than 3.5 to 1, subject to certain exceptions in the event of a Material Acquisition. The interest coverage ratio is calculated by dividing Consolidated EBIT by Consolidated Interest Expense, and the leverage ratio is calculated by dividing Consolidated Net Debt by Consolidated EBITDA. At March 19, 2020, there were no borrowings outstanding under the New Credit Agreement.
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels. The Company operates through two segments: Retail Segment and Foodservice Segment. Its Retail Segment manufactures and sells frozen breads, refrigerated dressings and dips, and shelf-stable dressings and croutons under the brand names New York BRAND Bakery, Marzetti, Marzetti Simply, Cardiniâs, Girardâs and others. It also manufactures and sells other products pursuant to brand license agreements, including Chick-fil-A sauces and dressings, Olive Garden dressings and Buffalo Wild Wings sauces. Its Foodservice segment manufactures and sells salad dressings, sandwich and dipping sauces, frozen breads and yeast rolls. Its products are sold through sales personnel, food brokers and distributors in the United States. Its products are also sold under private label to restaurants. It also manufactures and sells various branded foodservice products to distributors.
Lancaster Colony Corporation Enters into a New $150 Million Credit Agreement with the Lenders Named in the New Credit Agreement and JPMorgan Chase Bank
LANCASTER COLONY CORPORATION 
