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Get filing alertsFlowers Foods secures $400M term loan to refinance maturing notes, extends covenant relief
Filed April 7, 2026 · Period ending April 6, 2026 · ~1 min read
Key Changes
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high
Entered $400M delayed-draw term loan facility to refinance $400M 3.500% notes maturing October 2026, shifting from fixed to floating-rate debt tied to SOFR plus 0.875%–2.000% margin based on leverage.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Extended covenant holiday through October 2027, allowing leverage ratio up to 4.00:1.00 instead of standard 3.75:1.00, providing flexibility following recent acquisitions or investments.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR → -
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Term loan requires minimum 4.50:1.00 interest coverage ratio and standard leverage covenant; proceeds restricted to repaying maturing notes and transaction costs with no net debt increase.
Item 1.01 — Entry into a Material Definitive Agreement verify on EDGAR →
Summary
Flowers Foods refinanced $400 million of notes maturing in October 2026 with a new three-year term loan facility, maintaining total debt levels while shifting from fixed 3.500% interest to floating rates tied to SOFR. The delayed-draw structure allows the company to fund anytime through October 1, 2026, with interest margins ranging from 0.875% to 2.000% depending on leverage and credit ratings.
This exposes the company to interest rate risk but may offer lower initial costs if SOFR remains favorable. The company simultaneously extended its covenant holiday through October 2027, relaxing the maximum leverage ratio to 4.00:1.00 from the standard 3.75:1.00.
This extension provides additional financial flexibility following recent acquisitions or investments, though it signals the company expects to operate near covenant limits for the next 18 months. The term loan maintains standard financial covenants including a 4.50:1.00 minimum interest coverage ratio. For retail holders, this is a routine debt management transaction that preserves financial flexibility while introducing modest interest rate exposure.
Section-by-Section Diff
Event · Item 1.01 — Entry into a Material Definitive Agreement
Flowers Foods entered a $400M term loan to refinance maturing 2026 Notes and extended covenant relief through Oct 2027.
Added in current filing · verify on EDGAR →
The 2026 Term Loan Credit Agreement requires that the Company use the net proceeds of the 2026 Term Loan Facility to, together with cash on hand, finance the repayment in full of the 2026 Notes and to pay the fees, costs and expenses incurred in connection therewith and with the execution of the 2026 Term Loan Facility and the Revolver Amendment
The term loan proceeds must be used to fully repay the maturing 2026 Notes along with associated transaction costs. This is a straightforward debt refinancing with no change in total debt level, though the interest rate structure shifts from fixed 3.500% notes to floating-rate term loan pricing.
Added in current filing · verify on EDGAR →
The maximum Leverage Ratio financial covenant requires that the Company maintain a Leverage Ratio of no greater than 3.75:1.00 on the last day of any fiscal quarter of the Company; provided that, at the Company’s option, such Leverage Ratio may be increased to 4.00:1.00 for any period of up to four consecutive fiscal quarters following an acquisition or investment, subject to certain conditions (any such increase, a “Covenant Holiday”); provided, further, that a Covenant Holiday is in effect from the closing date of the 2026 Term Loan Facility through and including the Company’s fiscal quarter ending October 9, 2027. The minimum Interest Coverage Ratio financial covenant requires that the Company maintain an Interest Coverage Ratio of no less than 4.50:1.00
The term loan requires the company to maintain a leverage ratio below 3.75:1.00 (or 4.00:1.00 during covenant holiday periods) and an interest coverage ratio above 4.50:1.00. These are standard financial maintenance covenants that limit how much debt the company can carry relative to earnings and ensure sufficient cash flow to service interest obligations.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jun 21, 2026 · How we verify