Bank of America just raised its EUR/USD forecast
Constellation Brands, Inc. (NYSE:STZ), a leading beverage company with a market capitalization of $33.2 billion and annual revenue of $10.2 billion, has entered into an amended and restated credit agreement, as reported in a recent SEC Form 8-K filing. According to InvestingPro, the company has maintained a strong dividend track record, raising its dividend for 10 consecutive years. The agreement, effective today, involves a restatement that refinances the company’s existing $2.25 billion senior unsecured revolving credit facility and extends its maturity to April 28, 2030.
The refinancing under the Eleventh Restated Credit Agreement also includes an increase in the general liens basket, allowing for liens up to 10.0% of consolidated tangible assets, up from the previous 7.5%. This move provides Constellation Brands with greater financial flexibility.
Constellation Brands, with its subsidiary CB International Finance S.à r.l., and a group of lenders led by Bank of America, N.A., as the administrative agent, have agreed to the terms that will govern the new credit facility. The company has guaranteed the prompt payment and performance of the subsidiary’s obligations under the agreement.
The lenders involved in this agreement have had previous commercial and financial dealings with Constellation Brands, including various banking and advisory services. It is noted that one of the lenders is also the trustee under an indenture for some of Constellation Brands’ outstanding notes, and some lenders have credit facilities secured by shares of the company’s class A common stock with entities related to the Sands family, which are affiliates of the company due to family relationships.
This financial maneuver is part of Constellation Brands’ broader strategy to manage its capital structure and liquidity. The company generates substantial EBITDA of nearly $4 billion, supporting its debt management capabilities. The full details of the Restatement Agreement and the Eleventh Restated Credit Agreement are included in the Exhibit 4.1 of the Form 8-K filed with the SEC, which serves as the source for this news article. For a comprehensive analysis of Constellation Brands’ financial health and detailed metrics, investors can access the full Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.
In other recent news, Constellation Brands has been the subject of several notable developments. Moody’s Ratings upgraded the company’s senior unsecured ratings from Baa3 to Baa2, citing expectations that Constellation’s debt-to-EBITDA leverage will remain stable over the next 12-18 months. This upgrade reflects the company’s strong margins and anticipated cost reductions following its wine divestiture. Meanwhile, Constellation Brands announced a leadership change with Paula Erickson set to join as Executive Vice President and Chief Human Resources Officer in April 2025. This transition is part of the company’s efforts to sustain its growth trajectory and human resources strategy.
Analysts have also weighed in on the company’s financial outlook. RBC Capital Markets reduced its price target for Constellation Brands to $233, maintaining an Outperform rating, while Jefferies lowered its target to $196, keeping a Hold rating. Both firms noted challenges in demand and growth expectations, particularly in the beer segment, but recognized strategic moves like wine brand divestitures as potential growth enhancers. TD Cowen maintained a Hold rating with a $180 price target, highlighting Constellation’s adjusted growth projections and cost reductions as appropriate responses to the current economic climate. Despite these adjustments, Constellation Brands’ strong performance in its Modelo, Corona, and Pacifico brands continues to support its premium valuation relative to peers.
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