SECTION 1 – REGISTRANT’S BUSINESS AND OPERATIONS
| Item 1.01 | Entry into Material Definitive Agreement. |
On April 29, 2022, Sysco Corporation (“Sysco” or the “Company”), Sysco Canada, Inc (“Sysco Canada”), and Sysco EU II S.à r.l. (together with Sysco Canada, the “Subsidiary Borrowers”) entered into a Credit Agreement with Bank of America, N.A., as administrative agent, and the lenders and guarantors party thereto (the “New Credit Agreement”), which replaces Sysco’s existing $2.0 billion senior revolving credit facility that was entered into on June 28, 2019, as amended (the “Existing Credit Agreement”). The aggregate commitments of the lenders under the New Credit Agreement, as of the effective date, are $3.0 billion, with an option to increase such commitments to $4.0 billion, and with a maturity date of April 29, 2027.
The New Credit Agreement contains customary terms and conditions for credit facilities of this type, including, without limitation, affirmative and negative covenants containing limitations on consolidations, mergers, and sales of assets, and limitations on the incurrence of certain liens. The New Credit Agreement contains customary reporting and other affirmative covenants, including, without limitation, a requirement to maintain a certain ratio of consolidated EBITDA to consolidated interest expense as described in the New Credit Agreement. The New Credit Agreement also contains customary events of default, including, without limitation, nonpayment of obligations under the New Credit Agreement, violation of covenants in the New Credit Agreement, and certain bankruptcy or insolvency events. Certain of the events of default are subject to exceptions, materiality qualifiers, and/or grace periods customary for credit facilities of this type. Borrowings by Sysco and the Subsidiary Borrowers under the New Credit Agreement are, in general, guaranteed by those wholly-owned subsidiaries of Sysco that are guarantors of the Company’s senior notes and debentures. Borrowings by the Subsidiary Borrowers are guaranteed by Sysco. As was the case with the Existing Credit Agreement, the New Credit Agreement will serve as a backstop for Sysco’s commercial paper program.
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 hereto and incorporated by reference herein.
Neither Sysco nor any of its affiliates has any material relationship with any of the other parties to the New Credit Agreement, except for (i) the Company’s previous credit facilities, with respect to which certain of the other parties to the New Credit Agreement (and their respective affiliates) were lenders and (ii) commercial banking, investment banking, underwriting, trust and other financial advisory services provided (or to be provided) to Sysco and its subsidiaries by certain of the lenders under the New Credit Agreement (and their respective affiliates), for which they have received (or will receive) customary fees and expenses.
SECTION 2 – FINANCIAL INFORMATION
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information included in Item 1.01 of this report is incorporated herein by reference.
