Constellation Brands, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Borrowings

Borrowings

3 Months Ended

May 31, 2019

Borrowings consist of the following:



	May 31, 2019						February 28, 2019
	Current		Long-term		Total		Total
(in millions)
Short-term borrowings
Senior credit facility, Revolving credit loan	$	55.0					$	59.0
Commercial paper	531.4						732.5
	$	586.4					$	791.5

Long-term debt
Senior credit facility, Term loan	$	5.0	$	486.6	$	491.6	$	492.8
Term loan credit facilities	50.0		1,424.1		1,474.1		1,486.4
Senior notes	998.6		9,822.1		10,820.7		10,816.9
Other	11.8		13.0		24.8		28.9
	$	1,065.4	$	11,745.8	$	12,811.2	$	12,825.0

Senior credit facility

The Company, CB International Finance S.à r.l., a wholly-owned subsidiary of ours (“CB International”), certain of the Company’s subsidiaries as guarantors, Bank of America, N.A., as administrative agent (the “Administrative Agent”), and certain other lenders are parties to a credit agreement, as amended and restated (the “2018 Credit Agreement”). The 2018 Credit Agreement provides for aggregate credit facilities of $2.5 billion.

Term Credit Agreement

The Company, the Administrative Agent, and certain other lenders are parties to a term loan credit agreement (the “Term Credit Agreement”). The Term Credit Agreement provides for aggregate credit facilities of $1.5 billion, consisting of a $500.0 million three-year term loan facility (the “Three-Year Term Facility”) and a $1.0 billion five-year term loan facility (the “Five-Year Term Facility”).

As of May 31, 2019, aggregate credit facilities under the 2018 Credit Agreement and the Term Credit Agreement consist of the following:



	Amount		Maturity		Amount		Maturity
(in millions)
2018 Credit Agreement				Term Credit Agreement
Revolving Credit Facility ^{(1) (2)}	$	2,000.0	Sept 14, 2023	Three-Year Term Facility ^{(1) (3)}	$	500.0	Nov 1, 2021
U.S. Term A-1 Facility ^{(1) (3)}	500.0		July 14, 2024	Five-Year Term Facility ^{(1) (3)}	1,000.0		Nov 1, 2023
	$	2,500.0			$	1,500.0


⁽¹⁾	Contractual interest rate varies based on our debt rating (as defined in the respective agreement) and is a function of LIBOR plus a margin, or the base rate plus a margin, or, in certain circumstances where LIBOR cannot be adequately ascertained or available, an alternative benchmark rate plus a margin.


⁽²⁾	We and/or CB International are the borrower under the $2,000.0 million Revolving Credit Facility. Includes a sub-facility for letters of credit of up to $200.0 million.


⁽³⁾	We are the borrower under the U.S. Term A-1 loan facility, the Three-Year Term Facility, and the Five-Year Term Facility.

As of May 31, 2019, information with respect to borrowings under the 2018 Credit Agreement and the Term Credit Agreement is as follows:



	2018 Credit Agreement						Term Credit Agreement
	Revolving Credit Facility			U.S. Term A-1 Facility ⁽¹⁾			Three-Year Term Facility ⁽¹⁾			Five-Year Term Facility ⁽¹⁾
(in millions)
Outstanding borrowings	$	55.0		$	491.6		$	499.6		$	974.5
Interest rate	3.6		%	4.0		%	3.6		%	3.7		%
LIBOR margin	1.13		%	1.50		%	1.13		%	1.25		%
Outstanding letters of credit	$	12.3
Remaining borrowing capacity ⁽²⁾	$	1,400.6


⁽¹⁾	Outstanding term loan facility borrowings are net of unamortized debt issuance costs.


⁽²⁾	Net of outstanding revolving credit facility borrowings and outstanding letters of credit under the 2018 Credit Agreement and outstanding borrowings under our commercial paper program of $532.1 million (excluding unamortized discount) (see “Commercial paper program”).

Commercial paper program

We have a commercial paper program which provides for the issuance of up to an aggregate principal amount of $2.0 billion of commercial paper. Our commercial paper program is backed by unused commitments under our revolving credit facility under our 2018 Credit Agreement. Accordingly, outstanding borrowings under our commercial paper program reduce the amount available under our revolving credit facility under our 2018 Credit Agreement. As of May 31, 2019, we had $531.4 million of outstanding borrowings, net of unamortized discount, under our commercial paper program with a weighted average annual interest rate of 2.9% and a weighted average remaining term of 17 days.

Subsequent Event

2019 Term Credit Agreement

In June 2019, the Company and Bank of America, N.A., as Administrative Agent and lender (the “Lender”) entered into a term loan credit agreement (the “2019 Term Credit Agreement”). The 2019 Term Credit Agreement provides for the creation of a $491.3 million five-year term loan facility (the “2019 Five-Year Term Facility”) maturing on June 28, 2024. The 2019 Five-Year Term Facility will be repaid in quarterly payments of principal equal to 1.25% of the original aggregate principal amount of the 2019 Five-Year Term Facility, with the balance due and payable at maturity. We plan to use proceeds from

borrowings under the 2019 Term Credit Agreement to repay in full the U.S. Term A-1 Facility under the 2018 Credit Agreement.

The obligations under the 2019 Term Credit Agreement are guaranteed by certain subsidiaries of the Company. The guarantors under the 2019 Term Credit Agreement are the same subsidiary guarantors as under the 2018 Credit Agreement. We and our subsidiaries are subject to covenants that are contained in the 2019 Term Credit Agreement, including those restricting the incurrence of additional indebtedness (including guarantees of indebtedness), additional liens, mergers and consolidations, transactions with affiliates, and sale and leaseback transactions, in each case subject to numerous conditions, exceptions and thresholds. The financial covenants are limited to a minimum interest coverage ratio and a maximum net leverage ratio.