Church & Dwight Co., Inc. (NYSE: CHD) has taken a significant step to strengthen its financial flexibility and liquidity by entering into a new \(2.0 billion unsecured revolving credit facility, replacing its prior \)1.5 billion facility. This new credit agreement, effective July 17, 2025, extends the maturity to July 17, 2030, with an option to increase commitments up to $2.75 billion. The facility is administered by Bank of America, Wells Fargo, and Truist Bank, reflecting strong banking relationships.
The credit facility’s interest rates are tied to benchmark rates such as Term SOFR for USD loans, with margins ranging from 0.625% to 1.125% depending on the company’s credit rating. Additionally, the company will incur customary fees including commitment fees between 0.05% and 0.10% and letter of credit fees from 0.75% to 1.375% per annum. The agreement includes standard covenants restricting liens, subsidiary indebtedness, asset dispositions, and requires maintaining an interest coverage ratio of at least 3.75x, ensuring disciplined financial management.
From a balance sheet perspective, as of fiscal year-end 2024, Church & Dwight reported \(2.2 billion in net long-term debt with no short-term borrowings, and an operating income of approximately \)807 million. The company’s interest expense was $95 million, indicating an interest coverage ratio of roughly 8.5x, well above the covenant requirement, underscoring strong earnings relative to debt costs.
This credit facility renewal aligns with Church & Dwight’s strategic focus on maintaining robust liquidity to support ongoing operations, potential acquisitions, and capital expenditures. It also reflects prudent risk management amid economic uncertainties and evolving market conditions.
In previous earnings calls, management emphasized disciplined capital allocation and maintaining a strong balance sheet to navigate economic volatility and invest in growth initiatives. This new credit agreement reinforces those themes by providing enhanced financial flexibility and capacity.
Looking forward, the increased credit capacity and extended maturity provide Church & Dwight with a solid foundation to pursue growth opportunities while managing financial risk effectively. Investors should view this development as a positive indicator of the company’s financial health and strategic foresight.
For detailed financial data and the full credit agreement, refer to the official SEC filing: Church & Dwight 8-K Credit Agreement July 2025.
Tags: CHD, ChurchDwight, FY2024, revolvingcreditfacility, longtermdebt, financialflexibility