Molson Coors Brewing Company, Molson Canada 2005, Molson Coors International LP, Molson Coors Canada Inc. and Molson Coors Brewing Company (UK) Limited Enters into a Credit Agreement
Jun 19 14
Molson Coors Brewing Company entered into a Credit Agreement by and among the Company, Molson Canada 2005 (‘MC 2005’), Molson Coors International LP (‘MCI LP’), Molson Coors Canada Inc. (‘MCCI’) and Molson Coors Brewing Company (UK) Limited (‘MCBC UK’), the Lenders party thereto, Deutsche Bank AG New York Branch, as Administrative Agent and an Issuing Bank, Deutsche Bank AG, Canada Branch, as Canadian Administrative Agent and Bank of America, N.A., as an Issuing Bank. MC 2005, MCI LP, MCCI and MCBC UK are referred to as the “Borrowing Subsidiaries. Pursuant to the Credit Agreement, the Company guaranteed all obligations of the Borrowing Subsidiaries owing under the Credit Agreement. The Credit Agreement replaces the $400,000,000 Credit Agreement, dated as of April 11, 2011 (as amended, the ‘Existing 2011 Credit Agreement’) and the $550,000,000 Credit Agreement, dated as of April 3, 2012, as amended (the ‘Existing 2012 Credit Agreement’). The Credit Agreement provides for a five-year revolving credit facility of $750,000,000 and the right of the Borrower to request an increase in the credit facility by an amount not to exceed the sum of $250,000,000 and such additional amounts as would not cause the company’s leverage ratio to exceed 3.50:1.00 on a pro forma basis after giving effect to such increase that is not committed by any lender. Unless terminated earlier, the Credit Agreement will mature on June 18, 2019, and the principal amount outstanding there under, together with all accrued unpaid interest and other amounts owed there under, if any, will be payable in full on such date. Loans under the Credit Agreement will bear interest, at the Company’s option, at a variable rate for U.S. dollar denominated loans, based on LIBOR or a base rate that is based on higher U.S. prime rate, the federal funds rate plus 0.5% and the LIBOR rate for one month plus 1% and, in the case of LIBOR loans, plus an applicable margin depending on the Debt Rating (as defined in the Credit Agreement), (b) for Canadian dollar denominated loans, based on the greater of the Canadian prime rate and the CDOR Rate (as defined in the Credit Agreement) plus 0.5%, for Canadian dollar denominated bills of exchange, based on an applicable margin based on the Debt Rating and for Sterling or Euro denominated loans, based on LIBOR plus an applicable margin based on the Debt Rating. The applicable margin ranges, in the case of LIBOR loans, from 0.875% to 2.00% per annum, depending upon the Debt Rating. With respect to loans accruing interest based on a base rate, interest payments are due quarterly in arrears on the last day of each fiscal quarter. With respect to loans accruing interest based on LIBOR, interest payments are due on the last day of the applicable interest period, or, if such interest period is greater than three months, the last day of each such three-month period. In the case of a payment default, the otherwise applicable interest rate may be raised 2.00% per annum on all overdue amounts. The Company will pay each lender under the Credit Agreement a commitment fee, which will accrue in an amount that ranges between 0.10% and 0.30% per annum, depending upon the Debt Rating, for the daily average undrawn commitment of such lender until such commitment terminates. Letters of credit under the Credit Agreement will be issued by the administrative agent, an Issuing Bank or such other lender as agreed to by the parties in an aggregate face amount up to $100,000,000. The credit agreement contains customary events of default and specified representations and warranties and covenants, including, among other things, covenants that restrict the ability of the Company and its subsidiaries to incur certain additional priority indebtedness, create or permit liens on assets, or engage in mergers or consolidations. The Credit Agreement also requires the Company to maintain a maximum leverage ratio of not greater than 3.50:1.00 as of the last day of any fiscal quarter.
The obligations under the Credit Agreement are general unsecured obligations of the Company and the Borrowing Subsidiaries. In connection with the Credit Agreement, the Company, and certain of its subsidiaries entered into a Subsidiary Guarantee Agreement, dated June 18, 2014 (the ‘Subsidiary Guarantee Agreement), pursuant to which certain subsidiaries agreed to guarantee, the payment when and as due of the obligations of the Company and/or certain borrowing subsidiaries under the credit agreement.