Chiquita Brands International has announced that its fully-owned subsidiary Chiquita Brands L.L.C. has successfully amended its existing Credit Agreement from 26 June 2011.
According to Chiquita, the amendment provides the company with more operating flexibility to execute its strategy and to manage the volatility inherent in its businesses.
Theamendment modifies certain financial covenants, including the Borrower Leverage Ratio, and amends the interest rate applicable to borrowings outstanding under the Credit Agreement to a market-based rate through until 30 September 2013.
During this period, Chiquita will pay an interest rate that will result in increased interest expense of approximately US$3m and US$5m in 2012 and 2013 respectively.
Aspart of the Company's 'continued efforts to mitigate its risk exposure and in order to provide a level of protection from the risk of a devaluing euro', Chiquita also announced that it had entered into option collar hedge transactions to hedge approximately half of its euro-based revenue exposure through the balance of 2012 and for all of 2013.
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