Tyson Foods has renegotiated a credit line with JP Morgan Chase Bank that provides up to $2.25 billion in credit through September 2026. The deal requires Tyson to keep its gross earnings to consolidated interest expense ratio at 3.5 to 1 at the end of each fiscal quarter.
Tyson said it also used cash on hand to repay all outstanding obligations under the company’s existing term loan agreement, dated as of March 22, 2021, which was roughly $500 million, according to the filing Monday (Oct. 4) with the U.S. Securities and Exchange Commission.
The company is also continuing to settle the antitrust price fixing cases brought against it and most of the poultry industry five years ago. Tyson agreed last week to pay $42.5 million to settle price fixing charges brought by some of its customers. This case was filed in the Northern District of Illinois and also involved Pilgrim’s and Mar-Jac poultry who settled for $44 million and $5.99 million, respectively. Tyson Food did not respond to multiple requests for comments on the recent $42.5 million settlement.
In January, Tyson set aside $221.5 million to settle all outstanding classes of the price-fixing litigation and now there are multiple class action suits underway for consumers seeking some of the overpayment made on chicken purchases from 2008 to 2016. There are also class actions suits open for investors who purchased Tyson stock from March 13, 2020 to Sept. 20, 2021, who may have suffered from stock losses related to the litigation. Tyson said in January the settlement was in the best interest of shareholders and stakeholders but it does not constitute any admission of liability.
Tyson originally said it would fight the charges and defend its innocence saying it had fired the instigators who took part in the scheme.
Shares of Tyson Foods (NYSE: TSN) closed Monday at $78.08, down 21 cents. Over the past 52 weeks Tyson shares have traded from a low of $55.82 to a high of $82.45.