MGP Ingredients Inc.
08/07/2026 | Press release | Distributed by Public on 08/07/2026 15:19
Material Agreement (Form 8-K)
Item 1.01. Entry into a Material Definitive Agreement.
On August 6, 2026, MGP Ingredients, Inc. (the "Company") entered into an Amendment No. 2 to Amended and Restated Credit Agreement ("Amendment No. 2") with Wells Fargo Bank, National Association, as administrative agent (in such capacity, the "Administrative Agent"), the other loan parties party thereto, and the lenders party thereto. Amendment No. 2 amended the Amended and Restated Credit Agreement, dated February 14, 2020 among the Company, as borrower, Wells Fargo Bank, National Association, as Administrative Agent, swingline lender and issuing lender, and the other lenders and parties thereto (as amended, including by Amendment No. 2, the "A&R Credit Agreement").
Pursuant to Amendment No. 2, the definition of Consolidated EBITDA was modified to permit the Company to add back, for any period on or prior to December 31, 2027, aggregate losses up to $20,000,000 related to accounts receivable from specific customers, subject to disclosure of such customers in writing to the Administrative Agent. In the event any receivables added back pursuant to this provision are recovered, such receivables must then be deducted from Consolidated EBITDA. As a result of Amendment No. 2, such uncollected receivables will not negatively impact the calculation of the financial covenants which the Company must comply with under the A&R Credit Agreement, including (i) a consolidated fixed charge coverage ratio covenant of not less than 1.25 to 1.00 and (ii) a consolidated net leverage ratio covenant of no greater than 4.00 to 1.00, as may be increased to 4.50 to 1.00 in any fiscal quarter in which a permitted acquisition is consummated and for the three consecutive fiscal quarters thereafter (such increase, an "Elevated Ratio Period"). The Company has exercised its option for an Elevated Ratio Period, commencing with the fiscal quarter ended June 30, 2026 and for the three fiscal quarters thereafter, in connection with the earnout obligations for the acquisition of Penelope Bourbon LLC.
In connection with Amendment No. 2, the Company entered into an Eighth Amendment to Note Purchase and Private Shelf Agreement (the "Eighth Amendment," and together with Amendment No. 2, the "Amendments"), dated August 6, 2026, among the Company, PGIM, Inc., and certain of its affiliates as noteholders. The Eighth Amendment amended the Note Purchase and Private Shelf Agreement, dated August 23, 2017 among the Company, as issuer, PGIM, Inc. and certain of its affiliates as noteholders. The Eighth Amendment incorporated conforming changes to the definition of Consolidated EBITDA in Amendment No. 2 for the purposes described above.
The Company undertook the Amendments described above as precautionary measures. The Company continues to believe that the third fiscal quarter of 2026 will represent its peak leverage, after which it expects leverage to decline. The Amendments were supported by the full participation of the banking group.
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