Item 1.01 - Entry Into a Material Definitive Agreement
On August 5, 2022, Bunge Limited Finance Corp. (“BLFC”), a wholly owned subsidiary of Bunge Limited (“Bunge”), entered into an unsecured Credit Agreement (the “Credit Agreement”) among BLFC, as borrower, CoBank, ACB, as administrative agent and lead arranger, and certain lenders party thereto from time to time (the “Lenders”). The Credit Agreement includes a U.S. $865,000,000 revolving credit facility (the “Revolving Loan Facility”) that matures on October 29, 2026, a U.S. $250,000,000 delayed draw term loan facility that BLFC is required to draw prior to October 28, 2022 (the “Term Loan I”) that will mature on October 29, 2028, and a U.S. $250,000,000 delayed draw term loan facility that BLFC is required to draw prior to February 3, 2023 (the “Term Loan II”) that will mature on August 5, 2027. The Credit Agreement amends and restates the existing $1,115,000,000 Credit Agreement, dated as of October 29, 2021, among BLFC, as borrower, CoBank, ACB, as administrative agent and lead arranger, and certain lenders party thereto from time to time. BLFC may use proceeds from future borrowings under the Credit Agreement to fund intercompany advances to Bunge and/or certain Bunge subsidiaries, repay outstanding pari passu indebtedness of BLFC and pay expenses incurred in connection with the Credit Agreement and any pari passu indebtedness of BLFC.
Borrowings under the Revolving Loan Facility will bear interest, at BLFC’s option, at the daily simple or term secured overnight financing rate (“SOFR”) plus a 0.10% SOFR Adjustment and the Applicable Margin (defined below). Borrowings under the Term Loan I and Term Loan II will bear interest at daily simple SOFR plus a 0.10% SOFR Adjustment and the Applicable Margin (defined below). The margin applicable to a SOFR borrowing (the “Applicable Margin”) will (i) vary between 1.000% and 1.625% for the Revolving Loan Facility, (ii) vary between 1.100% and 1.725% for the Term Loan I, and (iii) vary between 0.900% and 1.525% for the Term Loan II and be based on the higher of the senior long-term unsecured debt rating that Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Ratings Services (“S&P”) provides of (a) Bunge, or (b) if Moody’s or S&P, as applicable, does not provide such a rating of Bunge, then the Bunge Master Trust or (c) if Moody’s or S&P, as applicable, does not provide such a rating of Bunge and the Bunge Master Trust, then BLFC (the “Rating Level”). Amounts under the Credit Agreement that remain undrawn are subject to a commitment fee payable quarterly based on the average undrawn portion of the Credit Agreement at rates ranging from 0.090% to 0.225%, varying based on the Rating Level. The Credit Agreement also includes benchmark replacement provisions.
The Credit Agreement contains certain customary representations and warranties and affirmative and negative covenants, including certain limitations on the ability of BLFC to, among other things, incur liens, incur indebtedness, sell or transfer assets or receivables or engage in mergers, consolidations, amalgamations or joint ventures, and customary events of default.
The obligations of BLFC under the Credit Agreement are guaranteed by Bunge pursuant to a separate Guaranty Agreement, dated August 5, 2022 (the “Guaranty”). The Guaranty contains certain customary representations and warranties and affirmative and negative covenants. The Guaranty requires Bunge to maintain a minimum total consolidated current assets to adjusted total consolidated current liabilities ratio, a maximum consolidated adjusted net debt to consolidated adjusted capitalization ratio and a maximum principal balance of secured indebtedness. The Guaranty also includes certain limitations on the ability of Bunge to engage in merger, consolidation or amalgamation transactions or sell or otherwise transfer all or substantially all of its property, business or assets.
From time to time, certain of the Lenders under the Credit Agreement and/or their affiliates provide financial services to Bunge, BLFC and other subsidiaries of Bunge.
The Credit Agreement and the Guaranty are included as Exhibits 10.1 and 10.2, respectively, hereto and are incorporated by reference herein. The foregoing descriptions of the Credit Agreement and the Guaranty do not purport to be complete and are qualified in their entirety by reference to the full text of those documents.