Sonoco Products amends credit agreement to add $800 million in term loan facilities
Sonoco Products Company borrowed $500 million on the closing date to refinance an existing syndicated term loan.
Key takeaways
- Sonoco Products Company (SON) entered into a credit agreement amendment providing for $800 million in new term loan facilities and borrowed $500 million to refinance existing debt, a regulatory filing showed on Sept. 30, 2026.
Sonoco Products Company (SON) said in a regulatory filing that it entered into a first amendment to its existing credit agreement on Sept. 25, 2026, establishing new term loan facilities totaling $800 million.
The amended agreement, with CoBank, ACB acting as administrative agent, provides for a $400 million Tranche A term loan facility maturing on Dec. 31, 2029, and a $400 million Tranche B delayed-draw term loan facility maturing on Dec. 31, 2031.
On the closing date, the company borrowed $500 million under the amended credit agreement. This total included the full $400 million from the Tranche A facility and $100 million from the Tranche B facility.
Sonoco used the initial $500 million in borrowings to refinance its existing $500 million syndicated term loan under the previous agreement, which was scheduled to mature in August 2028.
The company may borrow the remaining $300 million of the Tranche B facility in no more than three draws of at least $25 million each within 12 months of the closing date. Sonoco expects to use those remaining funds for future debt refinancings.
Borrowings under the Tranche A term loan bear interest at either Term SOFR, Daily Simple SOFR, or a base rate, plus an applicable margin. The SOFR margin ranges from 1.575% to 2.075%, while the base rate margin ranges from 0.575% to 1.075%, depending on Sonoco's senior unsecured long-term debt ratings from S&P and Moody's. The Tranche A loan requires no scheduled payments before maturity and allows prepayments without premium or penalty.
Borrowings under the Tranche B term loan carry a SOFR margin ranging from 1.675% to 2.175% and a base rate margin ranging from 0.675% to 1.175%, determined by the same debt ratings. The company must pay a ticking fee ranging from 0.100% to 0.225% per year on the daily unused amount of the Tranche B commitments. Like the Tranche A facility, the Tranche B loan has no scheduled payments before maturity and permits prepayments at any time without penalty.
W. Patrick Youngblood, Vice President and Global Treasurer, signed the agreement on behalf of the company.