CHARLOTTE, NC - Coca-Cola (NYSE:KO) Consolidated, Inc. (NASDAQ:COKE) announced the termination of its existing $1.3 billion term loan facilities. The company, based in Charlotte, North Carolina, stated on Monday that it had notified the lenders on June 20, 2024, of its decision to permanently reduce the commitments under its term loan agreement to zero, effective June 27, 2024.
The terminated facilities included a $800 million three-year term loan and a $500 million five-year term loan, which were initially set to mature on June 10, 2027, and June 10, 2029, respectively. The agreement was arranged with Wells Fargo (NYSE:WFC) Bank, National Association, serving as the administrative agent, along with other lenders.
According to the filing, there were no amounts outstanding under the term loan facilities at the time of the termination notice. The decision to end the agreement will reduce the company's aggregate commitments from $1.3 billion to zero.
Coca-Cola Consolidated, the largest Coca-Cola bottler in the United States, has not disclosed the reason for this financial maneuver in the filing. As per regulatory requirements, the termination of the loan agreement was officially filed with the Securities and Exchange Commission (SEC) on June 24, 2024.
The company, which is incorporated in Delaware and operates under the Standard Industrial Classification for bottled and canned soft drinks and carbonated waters, has made this information public in accordance with the SEC's current reporting standards.
In other recent news, Coca-Cola Consolidated, the largest Coca-Cola bottler in the U.S., has made significant moves in its financial management. The company announced a modified Dutch auction tender offer to repurchase up to $2.0 billion of its common stock.
The specifics of the tender offer include odd lot priority and conditional tenders, with the final purchase price being the lowest price within the specified range that allows the company to buy back the maximum value of shares. The offer is set to expire on June 18, 2024, unless extended or terminated by the company. The buyback is contingent on the company securing at least $2.5 billion in gross proceeds from new term loan facilities and/or note offerings.
Furthermore, Coca-Cola Consolidated declared a quarterly dividend of $0.50 per share for the second quarter of 2024, payable on May 10, 2024, to shareholders of record at the close of business on April 26, 2024. These recent developments reflect the company's ongoing commitment to manage its capital structure and return value to its shareholders.
InvestingPro Insights
As Coca-Cola Consolidated (NASDAQ:COKE) streamlines its financial structure by terminating its $1.3 billion term loan facilities, investors may find it valuable to consider some key financial metrics and insights from InvestingPro. The company, with a market cap of $9.69 billion, trades at a P/E ratio of 21.22, suggesting a premium valuation relative to near-term earnings growth. Despite this high P/E ratio, Coca-Cola Consolidated has a history of consistent dividend payments, having maintained them for 53 consecutive years, and currently offers a dividend yield of 1.86%. This commitment to shareholder returns is noteworthy, especially when combined with the fact that the company has experienced a high return over the last year, with a 55.44% one-year price total return.
From a liquidity standpoint, the company's liquid assets surpass its short-term obligations, which aligns with its decision to reduce its term loan commitments to zero. Additionally, with a moderate level of debt, Coca-Cola Consolidated operates with a financial prudence that may reassure investors. For those interested in further insights and metrics, InvestingPro offers additional tips on the company's financial health and projections. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and discover the 5 additional InvestingPro Tips for Coca-Cola Consolidated at https://www.investing.com/pro/COKE.
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