Flowers loan covenants amended for more borrowing flexibility

by Josh Sosland
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Flowers Foods products
$500 million credit arrangement extended until November 2022.

THOMASVILLE, GA. — Flowers Foods, Inc. will be allowed to increase its maximum leverage ratio to 4:1 (debt to EBITDA) for up to four consecutive quarters following a quarter in which an acquisition has been completed, under a new arrangement with its lender. Amendments in a credit agreement between Flowers and Deutsche Bank AG were disclosed Nov. 29 in an 8-K filing with the Securities and Exchange Commission.

The amendment was the sixth since Flowers and Deutsche Bank signed a credit agreement in 2003. The latest amendment extends maturity of the credit agreement until Nov. 29, 2022. The principal amount of the senior unsecured revolving facility remains unchanged at $500 million. In the amendment, the applicable facility fee was lowered to 0.05% to 0.3% (from 0.05% to 0.5%) due on commitments under the agreement.

The 4:1 leverage increase is conditioned on Flowers having maintained a ratio of no more than 3.75:1 for the two quarters prior to the action raising the company’s debt. In the 12 weeks ended Oct. 7, adjusted EBITDA at Flowers was $112,356,000 (which annualizes to about $450 million), and the company’s aggregate debt was $1,197 million.


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