Poultry processor Sanderson Farms' existing revolving credit facility through a consortium of banks has been increased from $500 million to $600 million, the company announced October 24. The new credit agreement will help Sanderson Farms facilitate its expansion plans, which includes a new big bird deboning complex that is being built in Palestine, Texas.
"We are pleased to make these amendments to our credit facility to support our strategic growth plan for the next five years, including the construction of our new poultry complex in Palestine, Texas," said Joe Sanderson Jr., chairman and CEO of Sanderson Farms." We appreciate the support of our bank group and we believe the amended terms and covenants reflect their confidence in the future of Sanderson Farms."
The credit remains unsecured and certain covenants related to the company's financial condition and capital expenditure needs have been amended in anticipation of the company's future growth plans. In addition, the termination date has been extended to October 24, 2018, unless otherwise extended. As of October 24, the company had no outstanding borrowings under the then existing revolving credit facility, but the company did have about $11.0 million outstanding letters of credit under the credit facility.