Sysco enters new $3 billion credit agreement with option to increase to $4 billion

Sysco Corporation (NYSE:SYY), a $39.4 billion market cap company and prominent player in the Consumer Staples Distribution industry, announced Monday that it has entered into a new credit agreement with Bank of America, N.A. and a group of lenders, replacing its previous $3 billion senior revolving credit facility. The new agreement, effective September 5, maintains an aggregate commitment of $3 billion and includes an option to increase the total commitment to $4 billion. The facility has a maturity date of September 5, 2030.

The new credit agreement covers Sysco and its wholly-owned subsidiaries, Sysco Canada, Inc. and Sysco Global Holdings B.V. It contains terms and conditions typical for credit facilities of this type, including covenants limiting consolidations, mergers, asset sales, and the incurrence of certain liens. According to InvestingPro data, Sysco maintains strong liquidity with a current ratio of 1.21, indicating its ability to meet short-term obligations. The agreement also requires Sysco to maintain a specified ratio of consolidated EBITDA to consolidated interest expense.

Borrowings under the agreement are generally guaranteed by Sysco’s wholly-owned subsidiaries that guarantee the company’s senior notes and debentures. Borrowings by the subsidiary borrowers are guaranteed by Sysco. The new facility will also serve as a backstop for Sysco’s commercial paper program, similar to the previous agreement.

Sysco stated that neither the company nor its affiliates have any material relationship with the other parties to the agreement, except for prior credit facilities and customary banking and advisory services provided by certain lenders.

This information is based on a statement in the company’s recent SEC filing.

In other recent news, Sysco Corporation’s fiscal fourth-quarter 2025 results showcased better-than-expected sales and adjusted EBITDA performance. However, the company provided lower-than-expected guidance for fiscal year 2026. In light of these results, Truist Securities raised its price target for Sysco to $90, maintaining a Buy rating, citing the impact of sales force changes. Guggenheim also increased its price target for Sysco twice, first to $85 and then to $87, while maintaining a Buy rating, highlighting operational initiatives and local case growth improvement as key factors. Meanwhile, Moody’s changed Sysco’s outlook from stable to negative, reflecting weakened credit metrics, with adjusted debt/EBITDA rising to 3.6x. Despite these financial developments, Sysco announced a regular quarterly cash dividend of $0.54 per share, payable in October. These recent developments offer a comprehensive look at Sysco’s current financial landscape and strategic priorities.

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