Monster Beverage Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Financial Statements and Exhibits
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On May 22, 2024, Monster Beverage Corporation (the “Company”), Monster Energy Company (“MEC”) and Monster Energy US LLC (“MEUS”) entered into a credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (the “Credit Agreement”).
The Credit Agreement provides for (i) a three-year unsecured delayed draw term loan facility in an aggregate principal amount of $750 million (the “Term Loan Facility”), to be made available to the Company for a period of three months following the effective date of the Credit Agreement and (ii) a five-year unsecured revolving credit facility in an aggregate principal amount of $750 million, including a $50 million sublimit for the issuance of letters of credit and a $75 million sublimit for swingline loans, to be made available to the Company, MEC, MEUS and certain other subsidiaries of the Company designated as a revolving borrower from time to time (the “Revolving Facility” and, collectively with the Term Loan Facility, the “Facilities”).
The Credit Agreement provides that (i) loans under the Term Loan Facility will be denominated in U.S. Dollars and (ii) loans under the Revolving Facility will be denominated in U.S. dollars, British pound sterling or euros. The Company may request an increase in the principal amounts of the Facilities available under the Credit Agreement in an aggregate principal amount of up to $750 million, to the extent that existing and/or new lenders agree to provide such additional amounts. All outstanding amounts under the Credit Agreement advanced pursuant to the Revolving Facility are due and payable on May 22, 2029; however, the maturity date of the Revolving Facility may be extended with the written consent of more than 50% of the lenders under the Revolving Facility for up to two additional one-year periods. All outstanding amounts under the Credit Agreement advanced pursuant to the Term Loan Facility are due and payable on May 22, 2027.
The outstanding principal amounts under the Facilities bear interest at a floating rate based upon, at the Company’s election, either (i) a negotiated base rate or (ii) a rate generally based on a secured overnight financing rate, plus, in each case, a margin based on, at the Company’s election, its total net leverage ratio or credit rating (if available). Interest is payable in arrears (i) in the case of a base rate loan, on the last day of March, June, September and December of each year and (ii) in the case of a secured overnight financing rate loan, on the last day of the one-month, three-month or six-month interest period applicable to the relevant borrowing.
The Facilities are unsecured, but the Term Loan Facility is guaranteed by MEC, and the Revolving Facility is guaranteed by the Company and MEC. The Credit Agreement contains customary representations and warranties, default provisions, and affirmative and negative covenants including, among others, (i) affirmative covenants regarding financial reporting and compliance with laws and (ii) financial and negative covenants regarding the maintenance of a maximum total net leverage ratio, liens, and fundamental changes. Many of the representations and warranties, default provisions and covenants are subject to materiality qualifiers, thresholds, and exceptions. The Credit Agreement contains a mandatory prepayment provision related to a change of control triggering event.
The preceding description of the Credit Agreement is not complete and is subject to and qualified in its entirety by reference to the Credit Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure set forth under Item 1.01 is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| Exhibit 10.1 | Credit Agreement dated as of May 22, 2024 among Monster Beverage Corporation, Monster Energy Company, Monster Energy US LLC, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto. |
| Exhibit 104 | The cover page from this Current Report on Form 8-K, formatted in iXBRL (Inline eXtensible Business Reporting Language). |
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.
| Monster Beverage Corporation | |
| Date: May 23, 2024 | /s/ Hilton H. Schlosberg |
| Hilton H. Schlosberg | |
| Vice Chairman of the Board of Directors and Co-Chief Executive Officer |