Item 1.01
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Entry into a Material Definitive Agreement.
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On February 16, 2017, Conagra Brands,
Inc. (the Company), entered into a Revolving Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent and a lender, JPMorgan Chase Bank, N.A., as syndication agent and a lender, and the
other financial institutions party thereto. The Credit Agreement provides for a revolving credit facility in a maximum aggregate principal amount outstanding at any one time of $1.25 billion (subject to increase to a maximum aggregate principal
amount of $1.75 billion).
The revolving credit facility provided for under the Credit Agreement replaces the Companys revolving
credit facility under that certain prior revolving credit agreement (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the Prior Credit Agreement), dated as of September 14, 2011, among the
Company, JPMorgan Chase Bank, N.A., as administrative agent and a lender, Bank of America, N.A., as syndication agent and a lender, and the other financial institutions party thereto. The maturity date of the Prior Credit Agreement was
September 14, 2018. No borrowings were outstanding under the Prior Credit Agreement upon its termination.
The revolving credit
facility provided for under the Credit Agreement matures on February 16, 2022, and is unsecured. The term of the Credit Agreement may be extended for additional
one-year
or
two-year
periods from the then applicable maturity date on an annual basis.
Loans (other than
bid loans) under the revolving credit facility will bear interest at, at the Companys election, either (a) LIBOR plus a percentage spread (ranging from 0.910% to 1.50%) based on the Companys senior unsecured long-term
indebtedness ratings or (b) the alternate base rate, described in the Credit Agreement as the greatest of (i) Bank of Americas prime rate, (ii) the federal funds rate plus 0.50% and
(iii) one-month
LIBOR plus 1.00%, plus a percentage spread (ranging from 0.0% to 0.50%) based on the Companys senior unsecured long-term indebtedness ratings. Additionally, the Company has the right
to request of the lenders (although the lenders have no obligation to provide) bid loans with a lower, fixed interest rate.
The Company has agreed to pay a facility fee, payable quarterly, at rates that range from 0.09% to 0.25% (based on the Companys senior
unsecured long-term debt ratings), and customary administrative agent fees and fees in respect of letters of credit.
The Credit Agreement
contains customary affirmative and negative covenants for unsecured investment grade credit facilities of this type and financial covenants requiring a maximum leverage ratio and a minimum interest coverage ratio.
The Credit Agreement contains events of default customary for unsecured investment grade credit facilities with corresponding grace periods.
If an event of default occurs and is continuing, the lenders may terminate and/or suspend their obligations to make loans and issue letters of credit under the Credit Agreement and/or accelerate amounts due under the Credit Agreement and exercise
other rights and remedies. In the case of certain events of default related to insolvency and receivership, the commitments of the lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due
and payable.
Certain of the lenders under the Credit Agreement (and their respective subsidiaries or affiliates) have in the past
provided, are currently providing or may in the future provide, investment banking, cash management, underwriting, lending, commercial banking, trust, leasing services, foreign exchange and other advisory services to, or engage in transactions with,
the Company and its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company and its subsidiaries or affiliates, for such services.
The foregoing description of the Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full
text of the Credit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form
8-K
and incorporated by reference herein.