Darden Restaurants Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
$DRI
Restaurants
Consumer Discretionary
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: September 16, 2024
(Date of earliest event reported)
DARDEN RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
Commission File Number: 1-13666
| (State or other jurisdiction of incorporation) | (IRS Employer Identification No.) | |||||||
(Address of principal executive offices, including zip code)
(407 ) 245-4000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 1.01 | Entry into a Material Definitive Agreement. | ||||
(a) Effective September 16, 2024, Darden Restaurants, Inc. (“Darden” or the “Company”) entered into Amendment No. 1 (the “Amendment”) to the Company’s existing $1,250,000,000 Revolving Credit Agreement, dated as of October 23, 2023 (the “Credit Agreement”), with Bank of America, N.A., as administrative agent (the “Agent”), the lenders (the “Credit Agreement Lenders”) and other agents party thereto.
Pursuant to the terms of the Amendment, the Company, the Agent and the Credit Agreement Lenders, have agreed to replace the prior financial covenant (which provided for a maximum consolidated total debt to total capitalization ratio) with a new financial covenant requiring the Company to maintain, measured as of the end of each fiscal quarter, a maximum consolidated leverage ratio of 3.50 to 1.00 (which may be temporarily increased to 4.00 to 1.00 upon the election of the Company as a result of a covered acquisition, subject to customary limitations set forth in the Credit Agreement). All other material terms and conditions of the Credit Agreement were unchanged.
Certain of the Credit Agreement Lenders and their affiliates have provided, from time to time, and may continue to provide, investment banking, commercial banking, financial and other services to the Company, including the Term Loan Agreement (defined below), letters of credit, derivative transactions, transfer agent services, trustee and custodial services, depository services and account processing services, for which the Company has paid and intends to pay customary fees.
The preceding description of the Amendment and the Credit Agreement is qualified in its entirety by reference to the full text of the Amendment, which is incorporated into this Item 1.01 by reference to Exhibit 10.1 to this Current Report on Form 8-K. The Credit Agreement was previously filed as Exhibit 10.1 to Darden’s Current Report on Form 8-K (File No. 1-13666), filed on October 24, 2023.
(b) On September 16, 2024 (the “Closing Date”), the Company entered into a senior unsecured $600 million 2-year Term Loan Credit Agreement (the “Term Loan Agreement”) with Bank of America, N.A., as administrative agent, the lenders (the “Term Loan Lenders”) and other agents party thereto, the material terms of which are consistent with the Credit Agreement, as amended by the Amendment.
The Term Loan Agreement contains customary representations and affirmative and negative covenants consistent with those in the Credit Agreement (including limitations on liens and subsidiary debt and a maximum consolidated leverage ratio of 3.50 to 1.00, which may be temporarily increased to 4.00 to 1.00 upon the election of the Company as a result of a covered acquisition, subject to customary limitations set forth in the Term Loan Agreement). The Term Loan Agreement also contains events of default customary for credit facilities of this type, consistent with the events of default in the Credit Agreement.
The Term Loan Agreement provides that the Company may make a single borrowing on any business day from the Closing Date until February 17, 2025 (such date, the “Funding Date”) and matures on the second anniversary of the Funding Date. The Company has not drawn on the Term Loan as of the date of this filing. The proceeds may be used to finance the Company’s anticipated acquisition of Chuy’s Holdings, Inc. (which pending transaction was previously disclosed in Darden’s Current Report on Form 8-K, filed on July 17, 2024) and to pay fees and expenses related thereto.
Interest rates on borrowings under the Term Loan Agreement will be based on a Term SOFR-based interest rate as described in the Term Loan Agreement, consistent with the terms of the Credit Agreement as amended by the Amendment and, in part, upon the Company’s credit ratings. Pricing for interest under the Term Loan Agreement may be modified in the event of a change in the rating of the Company’s long-term senior unsecured debt. The applicable interest rate for the borrowing under the Term Loan Agreement will be determined as of the Funding Date.
Certain of the Term Loan Lenders and their affiliates have provided, from time to time, and may continue to provide, investment banking, commercial banking, financial and other services to the Company, including the Credit Agreement, letters of credit, derivative transactions, transfer agent services, trustee and custodial services, depository services and account processing services, for which the Company has paid and intends to pay customary fees.
The preceding description of the Term Loan Agreement is qualified in its entirety by reference to the full text of the Term Loan Agreement, which is incorporated into this Item 1.01 by reference to Exhibit 10.2 to this Current Report on Form 8-K.
2
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. | ||||
The information set forth above under Item 1.01(b) is hereby incorporated by reference into this Item 2.03.
| Item 9.01 | Financial Statements and Exhibits. | ||||
(d)Exhibits.
| Exhibit Number | Description of Exhibit | |||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DARDEN RESTAURANTS, INC. | |||||
| By: | /s/ Scott C. Brophy | ||||
| Scott C. Brophy | |||||
| Vice President, Treasurer | |||||
Date: September 18, 2024
4