Business Context and Reporting Period
Cal-Maine Foods, Inc. filed a Form 8-K on August 31, 2026, reporting the entry into a material definitive agreement. The filing details the execution of a Second Amended and Restated Credit Agreement effective as of August 31, 2026.
Key Financial Metrics and Debt Structure
- Credit Facility: A senior unsecured revolving credit facility with an initial aggregate principal amount of up to $250 million.
- Sublimits: Includes a $25 million sublimit for standby letters of credit and a $25 million sublimit for swingline loans.
- Accordion Feature: Permits an increase of up to $250 million in aggregate via incremental senior term loans or increased revolving commitments.
- Utilization: As of September 1, 2026, no amounts were borrowed under the Revolver, and $5.9 million in standby letters of credit were issued.
- Maturity: The facility has a five-year term, maturing on August 31, 2031.
- Interest Rate: Based on Term SOFR Rate plus Applicable Margin or Base Rate plus Applicable Margin.
Material Changes Versus Prior Period
The New Credit Agreement amends and restates the Company's existing Amended and Restated Credit Agreement dated November 15, 2021. This represents a refinancing and restructuring of the Company's primary liquidity facility.
Guidance, Covenants, and Management Commentary
- Use of Proceeds: General working capital, corporate purposes, capital expenditures, permitted acquisitions, and funding fees/expenses associated with the agreement.
- Financial Covenants:
- Maximum Total Funded Debt to Capitalization Ratio of no greater than 50% (tested quarterly).
- Minimum Tangible Net Worth of $1.5 billion plus 50% of consolidated net income (if positive) less permitted restricted payments for each fiscal quarter after May 30, 2026.
- Dividends and Repurchases: Permitted provided no uncured event of default exists and the Company remains in compliance with financial covenants on a pro forma basis.
- Guarantees: The facility is guaranteed by all wholly-owned direct and indirect domestic subsidiaries.
Investor Verification Checklist
- Verify the specific "Applicable Margin" rates defined in the full Credit Agreement (Exhibit 10.1) to assess interest cost.
- Confirm the Company's current Total Funded Debt to Capitalization Ratio to ensure compliance with the 50% covenant.
- Review the definition of "Tangible Net Worth" in the agreement to understand the calculation of the $1.5 billion minimum threshold.
- Monitor future utilization of the $250 million Revolver and the $5.9 million letter of credit usage.