UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
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| Item 1.01 | Entry into a Material Definitive Agreement |
On March 19, 2020, Lancaster Colony Corporation (the “Company”) entered into a new $150 million credit agreement (the “New 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.
The foregoing description of the New Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the New Credit Agreement, which is filed as Exhibit 10.1 and attached hereto.
| Item 1.02 | Termination of a Material Definitive Agreement |
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 1.02.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement |
The information set forth under Item 1.01 is hereby incorporated by reference into this Item 2.03.
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| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |||
| 10.1 |
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| 104 |
Cover Page Interactive Data File (embedded with the Inline XBRL document) | |||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Lancaster Colony Corporation | ||||||
| Date: March 20, 2020 |
By: |
/s/ Thomas K. Pigott | ||||
| Thomas K. Pigott | ||||||
| Chief Financial Officer and Assistant Secretary | ||||||
| (Principal Financial and Accounting Officer) | ||||||
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