Tyson Foods has renegotiated a credit line with JPMorgan Chase Bank that offers up to $2.25 billion over the next five years to help the company pay down expenses.
Springdale-based Tyson Foods has taken on increased costs lately because of covid-19 and legal obligations.
According to the agreement with JPMorgan Chase Bank, disclosed in a shareholder filing Wednesday, the deal requires Tyson to keep its ratio of gross earnings to consolidated interest expense at 3.5-to-1 at the end of each fiscal quarter.
Tyson said in the filing that it would use cash on hand to repay all outstanding obligations under the company's existing term loan agreement, dated March 22. The total outstanding was $500 million.
Expenses have grown during the pandemic, with more than $700 million going toward efforts to prevent the spread of covid-19, as well as additional nursing staffers and vaccinations. Rising raw material costs and labor issues have also affected earnings.
The company last month increased pay for Northwest Arkansas poultry workers and offered sign-on bonuses and extra benefits, including a chance for fully vaccinated employees to take part in a drawing for $10,000.
On top of that, Tyson, Pilgrim's Pride and other chicken producers have been settling lawsuits related to price-fixing allegations brought five years ago by some of their customers.
One antitrust suit, filed in a federal court in Chicago, accused some of the biggest chicken companies of using manipulative tactics between 2008 and 2016 to artificially drive up the cost of chicken.
Last week, Tyson agreed to pay $42.5 million to some indirect buyers. The company did not immediately return a message seeking more details.
In January, Tyson notified shareholders of a $221.5 million deal to settle all claims brought against it by direct, indirect and end-user customers. It also agreed to cooperate with the Department of Justice in exchange for leniency with the agency's investigation into the matter.
At the time, Tyson spokesman Gary Mickelson issued a statement saying the company did not admit any liability in its settlements but believes that the resolution of these cases is in the best interest of the company and its shareholders.
A pending class-action lawsuit brought by investors who purchased Tyson stock from March 13, 2020, to Dec. 15 alleges the investors suffered losses because of false or misleading statements made by Tyson about its response to the pandemic.