Tyson Foods 2015 Annual Report Download - page 35
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Please find page 35 of the 2015 Tyson Foods annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Capital Resources
CreditFacility
Cashflowsfromoperatingactivitiesandcurrentcashonhandareourprimarysourcesofliquidityforfundingdebtservice,capitalexpenditures,dividendsand
sharerepurchases.Wealsohavearevolvingcreditfacility,withacommittedcapacityof$1.25billion,toprovideadditionalliquidityforworkingcapitalneeds,
lettersofcreditandasourceoffinancingforgrowthopportunities.AsofOctober3,2015,wehadoutstandinglettersofcredittotaling$6millionissuedunderthis
facility,noneofwhichweredrawnupon,whichleft$1,244millionavailableforborrowing.Ourrevolvingcreditfacilityisfundedbyasyndicateof42banks,with
commitmentsrangingfrom$0.3millionto$85millionperbank.Thesyndicateincludesbankholdingcompaniesthatarerequiredtobeadequatelycapitalized
underfederalbankregulatoryagencyrequirements.
Capitalization
Tomonitorourcreditratingsandourcapacityforlong-termfinancing,weconsidervariousqualitativeandquantitativefactors.Wemonitortheratioofournet
debttoEBITDAassupportforourlong-termfinancingdecisions.AtOctober3,2015,andSeptember27,2014,theratioofournetdebttoEBITDAwas2.1xand
4.1x,respectively.RefertoPartII,Item6,SelectedFinancialData,foranexplanationandreconciliationtocomparableGAAPmeasures.Thedecreaseinthisratio
forfiscal2015isduetoincreasedEBITDAandtheapproximate$1.7billionnetdebtreductionduringfiscal2015.
Credit Ratings
2016Notes
OnFebruary11,2013,Standard&Poor'sRatingsServices(S&P),upgradedthecreditratingofthe2016Notesfrom"BBB-"to"BBB."Thisupgradedidnot
impacttheinterestrateonthe2016Notes.
OnJune7,2012,Moody'sInvestorsService,Inc.(Moody's)upgradedthecreditratingofthe2016Notesfrom"Ba1"to"Baa3."Thisupgradedecreasedthe
interestrateonthe2016Notesfrom6.85%to6.60%,effectivebeginningwiththesix-monthinterestpaymentdueOctober1,2012.
Aone-notchdowngradebyMoody'swouldincreasetheinterestratesonthe2016Notesby0.25%.Atwo-notchdowngradefromS&Pwouldincreasetheinterest
ratesonthe2016Notesby0.25%.
RevolvingCreditFacility
S&P’scorporatecreditratingforTysonFoods,Inc.is"BBB."Moody’ssenior,unsecured,subsidiaryguaranteedlong-termdebtratingforTysonFoods,Inc.is
"Baa3."FitchRatings'(Fitch),issuerdefaultratingforTysonFoods,Inc.is"BBB."Thebelowtableoutlinesthefeespaidontheunusedportionofthefacility
(FacilityFeeRate)andletterofcreditfees(UndrawnLetterofCreditFeeandBorrowingSpread)dependingontheratinglevelsofTysonFoods,Inc.fromS&P,
Moody'sandFitch.
RatingsLevel(S&P/Moody's/Fitch)
FacilityFee
Rate
UndrawnLetterof
CreditFeeand
BorrowingSpread
A-/A3/A-orabove 0.100% 1.000%
BBB+/Baa1/BBB+ 0.125% 1.125%
BBB/Baa2/BBB(currentlevel) 0.150% 1.250%
BBB-/Baa3/BBB- 0.200% 1.500%
BB+/Ba1/BB+orlower 0.250% 1.750%
Intheeventtheratinglevelsaresplit,theapplicablefeesandspreadwillbebasedupontheratinglevelineffectfortwooftheratingagencies,or,ifallthreerating
agencieshavedifferentratinglevels,theapplicablefeesandspreadwillbebasedupontheratinglevelthatisbetweentheratinglevelsoftheothertworating
agencies.
Debt Covenants
Ourrevolvingcreditandtermloanfacilitiescontainaffirmativeandnegativecovenantsthat,amongotherthings,maylimitorrestrictourabilityto:createliens
andencumbrances;incurdebt;merge,dissolve,liquidateorconsolidate;makeacquisitionsandinvestments;disposeofortransferassets;changethenatureofour
business;engageincertaintransactionswithaffiliates;andenterintohedgingtransactions,ineachcase,subjecttocertainqualificationsandexceptions.In
addition,wearerequiredtomaintainminimuminterestexpensecoverageandmaximumdebt-to-capitalizationratios.
Ourseniornotesalsocontainaffirmativeandnegativecovenantsthat,amongotherthings,maylimitorrestrictourabilityto:createliens;engageincertain
sale/leasebacktransactions;andengageincertainconsolidations,mergersandsalesofassets.
WewereincompliancewithalldebtcovenantsatOctober3,2015.
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