| Item 1.01. | Entry into a Material Definitive Agreement. |
On October 7, 2020, Coca-Cola Consolidated, Inc. (the “Company”) and its majority-owned subsidiary, Piedmont Coca-Cola Bottling Partnership (“Piedmont”), entered into a first amended and restated revolving credit loan agreement (the “Revolving Loan Agreement”), pursuant to which the Company may borrow, repay and reborrow up to $400 million pursuant to a revolving credit line provided by Piedmont in such amounts as the Company may from time to time request and as Piedmont may in its sole and absolute discretion make available for borrowing. Under the Revolving Loan Agreement, Piedmont has the right to reduce the amount the Company is permitted to borrow thereunder in its sole discretion from time to time.
Pursuant to the terms of the Revolving Loan Agreement, effective October 7, 2020, the revolving credit loan agreement, dated as of September 18, 2017, between the Company and Piedmont (and the related demand short-term promissory note) (together, the “Prior Revolving Loan Agreement”) was terminated and, commencing on such date, any outstanding principal balance under the Prior Revolving Loan Agreement is considered to be outstanding under, and governed by the terms of, the Revolving Loan Agreement.
Piedmont is a joint venture between the Company and The Coca-Cola Company in which the Company owns approximately 77.3%. The Company and The Coca-Cola Company formed Piedmont in 1993 to distribute and market nonalcoholic beverages primarily in portions of North Carolina and South Carolina. The Company provides a portion of the nonalcoholic beverage products that Piedmont distributes and markets to Piedmont at cost and receives a fee for managing the operations of Piedmont pursuant to a management agreement.
Loans made to the Company by Piedmont under the Revolving Loan Agreement are evidenced by the demand short-term promissory note (the “Note”) provided by the Company to Piedmont. The Revolving Loan Agreement terminates upon the first to occur of the following: (i) demand for payment in full of the amounts borrowed under the Revolving Loan Agreement is made by Piedmont, (ii) 30 days following the date on which written notice of termination is provided by either the Company or Piedmont to the other party or (iii) December 31, 2022, which date shall be automatically extended for an additional year on each anniversary thereof (unless the Revolving Loan Agreement is otherwise terminated prior thereto). Upon the termination of the Revolving Loan Agreement, the unpaid principal amounts borrowed thereunder, all accrued and unpaid interest thereon and all fees will be due and payable by the Company.
The Company is required to repay the unpaid principal amounts borrowed under the Revolving Loan Agreement, all accrued and unpaid interest thereon and all fees due and payable by the Company upon the demand of Piedmont made at any time in its sole and absolute discretion, and the Company has the option to repay at its election, in whole or in part, at any time and from time to time prior to any demand by Piedmont, any amounts borrowed under the Revolving Loan Agreement. In the event Piedmont reduces the amount the Company is permitted to borrow under the Revolving Loan Agreement and, as a result, the outstanding borrowings under the Revolving Loan Agreement exceed the reduced amount the Company is permitted to borrow thereunder, upon its receipt of notice from Piedmont, the Company is required to immediately prepay such excess amount to Piedmont.
The unpaid principal amounts borrowed under the Revolving Loan Agreement will bear interest (which will be adjusted monthly and computed on the basis of a year consisting of 365 days) during each fiscal month of the Company and Piedmont at a rate equal to the average rate for such month for commercial paper with a 30-day maturity which has been rated Al by Standard & Poor’s and P1 by Moody’s Investors Service. The Revolving Loan Agreement requires the Company to reimburse Piedmont upon demand for all reasonable expenses, including reasonable attorneys’ fees, incurred by Piedmont in the preparation,
