Constellation Brands ends $500 million credit line, issues new senior notes

Constellation Brands, Inc. (NYSE:STZ) announced Thursday it has terminated all commitments under a $500 million delayed draw term loan credit agreement originally entered into with Bank of America, N.A. and other lenders on May 9, 2025. The termination notice was submitted on October 16 and will take effect October 21. According to the company’s statement, there were no borrowings outstanding under the credit agreement and no early termination penalties were incurred. The agreement was initially set to expire on November 7, 2025.

In a separate development, Constellation Brands disclosed the issuance of $500 million aggregate principal amount of 4.950% Senior Notes due 2035. The notes were issued under a supplemental indenture dated Friday with Manufacturers and Traders Trust Company acting as trustee. The public offering price for the notes was 99.716% of the principal amount. The company, currently valued at $24.54 billion in market capitalization, maintains a debt-to-equity ratio of 1.41, which InvestingPro analysis suggests is manageable given its strong cash flow generation.

Interest on the notes will be paid semi-annually on May 1 and November 1, starting May 1, 2026. The notes will mature on November 1, 2035. The company retains the option to redeem the notes in whole or in part, subject to terms specified in the supplemental indenture.

The supplemental indenture outlines customary events of default, including failure to pay principal or interest, certain covenant breaches, and specified bankruptcy or insolvency events. If an event of default occurs and continues, the trustee or holders of at least 25% of the outstanding notes may declare the principal and accrued interest due and payable.

Constellation Brands stated that the notes were registered with the Securities and Exchange Commission under its registration statement filed on November 10, 2022.

This information is based on a company press release filed with the SEC.

In other recent news, Constellation Brands announced a $500 million senior notes offering due in 2035. The company entered into an underwriting agreement with several financial institutions, including BofA Securities and J.P. Morgan Securities, for the sale of these notes. Meanwhile, Constellation Brands reported second-quarter earnings per share of $3.63, surpassing TD Cowen’s estimates, although the firm lowered its stock price target to $144 while maintaining a Hold rating. Bernstein SocGen Group reiterated an Outperform rating with a price target of $195, considering potential impacts of immigration policies on sales volumes. RBC Capital also maintained an Outperform rating, setting a price target of $200, and described the recent earnings as solid despite challenging beer depletions. These developments reflect a mix of financial strategies and market analyses surrounding Constellation Brands.

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