MCCORMICK & CO INC 8-K

What Happened

• On April 28, 2026, McCormick & Company, Incorporated entered into a Term Loan Agreement with a group of lenders and Citibank, N.A. as administrative agent, providing up to $2.0 billion in term loan commitments to be available at the closing of McCormick’s pending merger to acquire Unilever PLC’s foods business. The Term Loan Facility matures three years after the Merger closing and is intended to fund part of the cash consideration and related fees and expenses.
• The filing also discloses that McCormick terminated $2.0 billion of commitments under a previously disclosed 364‑day bridge facility (originally up to $15.7 billion) effective April 28, 2026; McCormick expects to use the Term Loan commitments in lieu of that portion of the bridge.

Key Details

• Term Loan amount: up to $2.0 billion; effectiveness: April 28, 2026; maturity: 3 years after the Merger Closing Date.
• Financial covenant: minimum Consolidated EBITDA to Interest Expense ratio of 3.75:1.00, tested on the last day of each fiscal quarter starting with the first quarter-end after Closing.
• Interest: floating-rate at borrower’s election — (i) Term SOFR + margin (0.750%–1.500% based on credit rating) or (ii) Base Rate + margin (0.000%–0.500% based on credit rating).
• Fees and defaults: a ticking fee of 0.10% per annum on the undrawn commitments from July 29, 2026 until earlier of termination/expiration or the Closing Date; customary events of default and remedies (acceleration, termination of commitments).

Why It Matters

• This $2.0B committed term loan reduces McCormick’s reliance on short‑term bridge financing for the Unilever foods acquisition and secures longer‑dated funding for part of the cash consideration.
• The three‑year maturity and the fixed covenant (3.75x EBITDA/interest) introduce explicit leverage and coverage requirements that could affect financial flexibility after closing.
• Interest expense will vary with market rates and McCormick’s credit rating; the ticking fee and other customary fees add carrying costs on undrawn commitments. Investors should note the new debt and covenant terms as they evaluate post‑deal leverage and credit profile.