SunOpta Inc. Debt Disclosure

11. Short-Term and Long-Term Debt

 

Scheduled maturities of long-term debt, including finance lease liabilities, are as follows:

Short-Term Debt

Line of Credit Facility

On June 13, 2025, the Company entered into an Uncommitted Trade Loan Facility Agreement (the "Trade Loan Agreement") with a third-party banking institution (the "Lender") providing for an uncommitted revolving line of credit facility (the "Line of Credit Facility") under which the Company may request, and the Lender may make, at its sole discretion, loans and advances of up to an aggregate amount of $15.0 million to be used solely to finance the purchase, production or sale of broth inventory. The initial maximum term of each individual loan or advance is 180 days, and the Company may request up to a 90-day extension of such initial term, which the Lender may agree to in its sole discretion. Borrowings under the Line of Credit Facility bear interest at SOFR plus a margin of 1.95%. Obligations under the Trade Loan Agreement are secured by a first security lien in favor of the Lender on all broth inventory of the Company and a guarantee from the Company's subsidiary, SunOpta Foods Inc. ("SunOpta Foods"). The Trade Loan Agreement is a continuing agreement and will remain in full effect until 30 days after either the Company or the Lender provides written notice of termination to the other party.

As at January 3, 2026, the Company had no outstanding borrowings under the Line of Credit Facility.

Long-Term Debt

Credit Facilities

On December 8, 2023, the Company entered into a five-year Credit Agreement (the "Credit Agreement") providing for (i) a $180.0 million term loan credit facility (the "Term Loan Credit Facility") and (ii) an $85.0 million revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan Credit Facility, the "Credit Facilities"). The Revolving Credit Facility includes $30.0 million of borrowing capacity available for letters of credit and provides for borrowings of up to $10.0 million on same-day notice including in the form of swingline loans. As at January 3, 2026, $4.6 million in letters of credit were issued but undrawn under the Revolving Credit Facility.

The Credit Facilities mature on December 8, 2028. Outstanding borrowings under the Term Loan Credit Facility as at January 3, 2026, are repayable in quarterly principal installments of $3.4 million from the fiscal quarter ending March 31, 2026 to the fiscal quarter ending December 31, 2027, and $4.5 million from the fiscal quarter ending March 31, 2028 to the fiscal quarter ending September 30, 2028, with the remaining principal balance of $121.5 million due on the maturity date.

Borrowings under the Credit Facilities bear interest at a margin over various reference rates, including a base rate (as defined in the Credit Agreement) and SOFR, selected at the option of the Company. The margin for the Credit Facilities is set quarterly based on the consolidated total net leverage ratio for the preceding fiscal quarter and will range from 1.00% to 2.25% with respect to base rate loans and from 2.00% to 3.25% for SOFR loans. For the year ended January 3, 2026, the weighted-average interest rate on outstanding borrowings under the Credit Facilities was 7.25%. In addition, the Company is required to pay an undrawn fee under the Revolving Credit Facility quarterly based on the consolidated total net leverage ratio for the preceding fiscal quarter ranging from 0.20% to 0.40% on the undrawn revolving commitments thereunder. The Company is also required to pay customary letter of credit fees, to the extent letters of credit are issued and outstanding under the Revolving Credit Facility.

All obligations under the Credit Facilities are unconditionally guaranteed by the Company and substantially all of the Company's existing and future direct and indirect wholly-owned material restricted subsidiaries organized in the U.S. and Canada (the "Subsidiary Guarantors") and, subject to certain exceptions and qualifications, such obligations are secured by first priority security interest in substantially all of the tangible and intangible assets of the Company and Subsidiary Guarantors.

The Credit Facilities contain a number of covenants that, among other things, restrict, subject to certain exceptions, the Company's ability to: create liens on assets; sell assets and enter into sale and leaseback transactions; pay dividends, prepay contractually subordinated indebtedness and make other restricted payments; incur additional indebtedness and make guarantees; make investments, loans or advances, including acquisitions; engage in certain transactions with affiliates; fundamentally change the character of the Company's business; enter into contractual obligations that restrict the ability of the Company or any Subsidiary Guarantor to grant a lien on its assets in favor of the lenders and other secured creditors under the Credit Facilities; and engage in mergers or consolidations. In addition, the Company is required to (i) maintain a minimum fixed charge coverage ratio of 1.20 to 1.00 as of the end of each quarterly test period and (ii) maintain a maximum consolidated total net leverage ratio of 3.50 to 1.00 for each quarterly test period for the fiscal quarter ending December 31, 2025 and thereafter; provided that, if the Company consummates an acquisition for consideration in excess of $50 million in any quarterly test period, then the maximum consolidated total net leverage ratio may, at the election of the Company (on no more than two occasions), be increased to 4.00 to 1.00 for the end of the four succeeding quarterly test periods.

The Credit Facilities also contain certain customary affirmative covenants and events of default. As at January 3, 2026, the Company was in compliance with all covenants of the Credit Agreement.