Cal-Maine Foods Enters $250M Revolving Credit Facility with BMO

What Happened

• Cal-Maine Foods, Inc. (CALM) announced a Second Amended and Restated Credit Agreement effective August 31, 2026 with BMO Bank N.A. as administrative agent. The agreement establishes a senior unsecured revolving credit facility with an initial aggregate commitment of up to $250 million and a five-year term maturing August 31, 2031.
• As of September 1, 2026, the company had not borrowed under the facility, but $5.9 million in standby letters of credit were outstanding. Interest on loans will be based on either Term SOFR plus an applicable margin or a Base Rate plus an applicable margin.

Key Details

• Revolver size: $250.0 million initial revolving commitment.
• Sublimits: $25.0 million for standby letters of credit and $25.0 million for swingline loans.
• Accordion: Ability to increase the facility by up to an additional $250.0 million with lender consent.
• Covenants: (1) maximum Total Funded Debt to Capitalization ratio of 50% (quarterly); (2) Minimum Tangible Net Worth of $1.5 billion plus 50% of consolidated net income (if positive) less permitted restricted payments for each fiscal quarter after May 30, 2026.
• Guarantees: Facility is guaranteed by all wholly-owned domestic subsidiaries and requires future wholly-owned domestic subsidiaries to guarantee as well.
• Permitted distributions: Dividends and share repurchases are allowed if no uncured default exists and the company meets financial covenants on a pro forma basis.

Why It Matters

• This new credit facility secures multi-year liquidity and financial flexibility for operations, capital expenditures and permitted acquisitions while reducing near-term refinancing risk (matures in 2031).
• The unused revolver (no borrowings as of Sept 1, 2026) and the $5.9M in letters of credit indicate available borrowing capacity today, which can support working capital or strategic needs.
• Financial covenants and guarantees could limit leverage, large asset sales or certain investments, and they set conditions that must be met before the company can make dividend payments or buybacks—important constraints for investors tracking capital returns.