| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
On February 5, 2019, Coca-Cola Consolidated, Inc. (the “Company”) entered into a confirmation of acceptance (the “Confirmation of Acceptance”) to sell $100 million aggregate principal amount of senior unsecured notes due 2026 (the “2026 Notes”) to MetLife Investment Advisors, LLC (“MetLife”) and certain of its affiliates (the “MetLife Affiliates”) pursuant to a Note Purchase and Private Shelf Agreement (the “Agreement”) dated January 23, 2019 between the Company, MetLife and each MetLife Affiliate that becomes party thereto.
Pursuant to the Confirmation of Acceptance, the Company has agreed to sell $100 million aggregate principal amount of the 2026 Notes on or before April 10, 2019. The 2026 Notes will bear interest at 3.93% and will mature on October 10, 2026, unless earlier redeemed by the Company. Interest on the 2026 Notes will be payable quarterly in arrears on each January 10, April 10, July 10 and October 10, commencing on July 10, 2019. Interest will be computed on the basis of a360-day year composed of twelve30-day months. The Company expects to use the proceeds for general corporate purposes. If the Company cancels the closing of the purchase and sale of the 2026 Notes or if such closing is not consummated on or prior to April 10, 2019, the Company is obligated to pay MetLife a cancellation fee, calculated to take into account any changes in interest rates between the Confirmation of Acceptance date and the date of cancellation, or a delayed delivery fee, calculated to take into account any loss in yield during the period from the anticipated closing date through the rescheduled closing date, as applicable. Closing of the purchase and sale of the 2026 Notes is subject to a number of customary conditions precedent and future events occurring, as set forth in the Agreement, and there can be no assurances that these future events will occur or that these conditions will be satisfied, or if not satisfied, waived at such closing.
Pursuant to the Agreement, the Company may, in one or a series of transactions, issue and sell, and MetLife and the MetLife Affiliates may consider in their sole discretion the purchase of, additional senior unsecured notes of the Company (the “Shelf Notes” and, together with the 2026 Notes, the “Notes”), in an aggregate principal amount of up to $300 million, including the 2026 Notes. The Shelf Notes will bear interest at either a fixed interest rate (“Fixed Rate Shelf Notes”) or a floating interest rate (“Floating Rate Shelf Notes”), and will have other particular terms, all as set forth in a confirmation of acceptance executed by the parties prior to the closing of each purchase and sale transaction. Fixed Rate Shelf Notes will have a maturity date of no more than 15 years after the date of original issuance and Floating Rate Shelf Notes will have a maturity date of no more than 10 years after the date of original issuance. Pursuant to the Agreement, the Notes are redeemable by the Company, in whole at any time or in part from time to time, at 100% of the principal amount of the Notes being redeemed together with accrued and unpaid interest thereon and any applicable Yield-Maintenance Amount, Prepayment Premium and/or Breakage Amount (each as defined in the Agreement) with respect to such Notes.
The Agreement contains customary representations and warranties and customary affirmative, negative and financial covenants. These covenants include, among other things, certain limitations on the ability of the Company and its subsidiaries to incur indebtedness, dispose of assets outside of the ordinary course of business and enter into certain merger or consolidation transactions, and a requirement that the Company and its subsidiaries use commercially reasonable efforts to maintain all material agreements necessary for the conduct of the Company’s business. The Agreement also contains two financial covenants: a “consolidated cash flow/fixed charges ratio” and a “consolidated funded indebtedness/cash flow ratio” (each as defined in the Agreement). The consolidated cash flow/fixed charges ratio requires the Company to maintain a consolidated cash flow to consolidated fixed charges ratio of 1.50 to 1.00 or higher. The consolidated funded indebtedness/cash flow ratio requires the Company to maintain a consolidated funded indebtedness to consolidated cash flow ratio of 6.00 to 1.00 or lower. The
