Business Context and Reporting Period
Company: The Scotts Miracle-Gro Company (SMG)
Filing Type: Form 8-K (Current Report)
Report Date: November 24, 2025
Event Date: November 21, 2025
Context: The Company entered into a new material definitive agreement to restructure its senior secured credit facilities, replacing its previous 2022 agreement.
Key Financial Metrics and Debt Structure
This filing details the terms of a new credit facility rather than operational financial performance (revenue, profit, or cash flow). Key debt metrics include:
- Total Committed Facilities: $2.0 billion aggregate principal amount.
- Revolving Credit Facility: $1.5 billion.
- Term Loan: $500 million.
- Expansion Option: Right to increase commitments by up to $500 million plus an unlimited additional amount subject to conditions.
- Maturity Date: November 21, 2030.
- Interest Rates (Initial):
- Term Benchmark/RFR Loans: Alternate Base Rate/Adjusted Term SOFR + 1.75%.
- ABR Loans: Alternate Base Rate + 0.75%.
- Commitment Fee: 0.30% on the daily available revolving commitment.
Material Changes Versus Prior Period
The new agreement replaces the Sixth Amended and Restated Credit Agreement dated April 8, 2022. Key changes include:
- Total Capacity Reduction: Aggregate principal amount decreased from $2.5 billion under the former agreement to $2.0 billion under the new agreement.
- Term Loan Reduction: Term loan principal reduced from $1.0 billion to $500 million.
- Revolving Facility: Remained constant at $1.5 billion.
- Maturity Extension: The new facility matures in 2030, extending the maturity date compared to the former agreement which would have terminated in April 2027.
Covenants, Risks, and Management Commentary
Financial Covenants:
- Leverage Ratio: Must not exceed 5.00 to 1.00 as of the last day of each fiscal quarter ending on or after December 27, 2025.
- Interest Coverage Ratio: Must maintain a minimum ratio of 3.00 to 1.00, 3.25 to 1.00, or 3.50 to 1.00, depending on specific standards in the agreement.
Restricted Payments:
- Allowed if no default exists.
- If the Leverage Ratio exceeds 4.0 to 1.0, restricted payments are capped at $225 million per fiscal year.
Security and Guarantees:
- Facilities are secured by a first priority security interest in accounts receivable, inventory, equipment, and intellectual property of the Company and domestic subsidiaries.
- Includes a pledge of 100% of capital stock of domestic subsidiaries and 65% of first-tier foreign subsidiaries.
Use of Proceeds: Financing working capital, general corporate purposes, and refinancing amounts outstanding under the former credit agreement.
Investor Verification Checklist
- Verify the Company's current leverage ratio to ensure compliance with the new 5.00 to 1.00 covenant threshold.
- Confirm the impact of the reduced term loan ($500M vs. $1.0M) on the Company's long-term liquidity strategy.
- Review the specific definitions of "Restricted Payments" to understand limitations on dividends or share repurchases if leverage exceeds 4.0 to 1.0.
- Monitor the interest rate spread adjustments that will occur after the delivery of consolidated financial statements for the quarter ending December 27, 2025.
- Assess the implications of the expanded lender syndicate and the inclusion of new co-syndication and documentation agents.