Item 1.01 Entry into a
Material Definitive Agreement.
On September 14, 2018 (the Effective Date), (i) Constellation Brands, Inc. (the
Company), CB International Finance S.à r.l., an indirect wholly owned subsidiary of the Company organized under the laws of Luxembourg (CBIF and together with the Company, the Borrowers), certain of the
Companys subsidiaries as guarantors, Bank of America, N.A., as administrative agent (the Administrative Agent), and certain other lenders (the Lenders), entered into a Restatement Agreement (the Restatement
Agreement) that amended and restated the Seventh Amended and Restated Credit Agreement dated as of August 10, 2018, by and among the Company, CBIF, the Administrative Agent and the other lenders thereto (the Seventh Restated Credit
Agreement and as amended and restated by the Restatement Agreement, the Eighth Restated Credit Agreement), (ii) the Company, Bank of America, N.A., as administrative agent (the Term Credit Agreement Administrative
Agent) and certain other lenders (the Term Lenders) entered into a Term Loan Credit Agreement (the Term Credit Agreement), and (iii) the Company, Bank of America, N.A., as administrative agent (the Bridge
Administrative Agent) and certain other lenders (the Bridge Lenders) entered into a Bridge Credit Agreement (the Bridge Credit Agreement).
Restatement Agreement
The principal
changes to the Seventh Restated Credit Agreement effected by the Restatement Agreement are (i) an increase of the revolving credit facility (the Revolving Credit Facility) from $1,500,000,000 to $2,000,000,000 and extension of its
maturity to September 14, 2023, (ii) the revision of the financial covenants in connection with the Companys proposed acquisition of additional common shares, plus warrants to purchase additional common shares, of Canopy Growth
Corporation (the Canopy Investment), and (iii) the addition of various representations and warranties, covenants and an event of default related to the Canopy Investment.
Revolving Credit Facility
The Revolving
Credit Facility was increased by $500,000,000 to $2,000,000,000. The maturity date of the Revolving Credit Facility was adjusted in the Eighth Restated Credit Agreement to be five years from the Effective Date.
The rate of interest payable on the Revolving Credit Facility, at the applicable Borrowers option, is equal to (i) LIBOR plus a
margin, or (ii) the highest of the federal funds effective rate plus 0.50%, the prime rate, and LIBOR plus 1.00% (the Base Rate), plus a margin. The margin for the Revolving Credit Facility is adjustable based upon the
Companys Debt Rating, as defined in the Eighth Restated Credit Agreement, and is between 0.875% and 1.50% for LIBOR borrowings, and 0.00% and 0.50% for Base Rate borrowings.
As of September 14, 2018, the Borrowers had $57.5 million of outstanding revolving credit loans under the Revolving Credit
Facility.
Financial Covenants
The definitions of Consolidated Interest Coverage Ratio and Consolidated Net Leverage Ratio in the Eighth Restated Credit Agreement were
revised to exclude indebtedness, and the related interest expense of such indebtedness, incurred by the Company or any of its subsidiaries that is designated to be used to finance the Canopy Investment and is redeemable at not more than 101% of the
principal amount thereof if the Canopy Investment is not consummated. Such indebtedness, and the related interest expense of such indebtedness, will be excluded from such definitions until the earlier of the