Sysco adds US$750m CoBank delayed-draw term loan for JRD acquisition

Sysco has added a US$750m senior unsecured delayed-draw term loan to its financing package, giving the food distribution group another source of long-dated capital for its proposed acquisition of JRD Unico and Warehouse Realty.

The facility was established on 4 September through an amendment to Sysco’s existing revolving credit agreement. CoBank is participating as lender and term-loan arranger, while Bank of America remains administrative agent.

The new commitment is divided evenly between two delayed-draw tranches. US$375m carries a six-year term and another US$375m carries an eight-year term. Sysco can draw each tranche through multiple advances during the one-year availability period rather than receiving the entire US$750m immediately.

That distinction is important for the headline financing figure. The amendment creates US$750m of committed capacity, but the SEC filing does not say the full amount has been borrowed. Loans that are drawn will rank equally in right of payment with other debt under the revolving credit agreement and will benefit from the same subsidiary guarantees supporting Sysco’s senior notes and existing term-loan obligations.

Sysco said the proceeds can be used for general corporate purposes, including acquisitions, and expects to use the facility in part to fund cash consideration, fees and expenses associated with the proposed JRD transaction.

The US$750m facility sits within a much larger acquisition-financing plan. Sysco had already arranged a US$3bn delayed-draw term facility and reduced a US$22bn bridge commitment to US$19bn as it prepared for the transaction. The company has also said permanent financing could include senior unsecured notes, hybrid debt, cash and equity or equity-linked securities.

For corporate liquidity, the delayed-draw structure allows Sysco to lock in committed funding while limiting the need to carry all of the debt before it is required.