B&G Foods Strengthens Financial Flexibility Through Amendment of Credit Agreement and Debt Repurchase Initiative
B&G Foods, Inc. (NYSE: BGS), a leading manufacturer and distributor of shelf-stable and frozen food and household brands, today announced the successful completion of an amendment to its senior secured credit facility. This strategic financial adjustment is part of the company’s broader initiative to enhance capital structure flexibility amid ongoing macroeconomic challenges in the consumer packaged goods (CPG) sector.
The credit agreement amendment reflects B&G Foods’ proactive approach to managing its leverage and liquidity, particularly in the context of an evolving industry environment marked by inflationary pressures, shifting consumer behaviors, and global economic uncertainty. The changes to the company’s credit facility are designed to provide greater operational breathing room and maintain access to working capital, while also supporting ongoing debt reduction efforts.
Key Changes to the Credit Agreement
Under the revised terms, B&G Foods has implemented a temporary increase in the maximum consolidated leverage ratio permitted under its revolving credit facility. This leverage ratio is a key financial covenant that compares the company’s net debt to its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), excluding share-based compensation.
Specifically, the amendment adjusts the maximum consolidated leverage ratio from the prior threshold of 7.00 to 1.00 to a higher 7.50 to 1.00. This elevated ratio will be in effect for a defined period—from the quarter ending June 28, 2025, through the quarter ending October 3, 2026. The ratio will then be reduced to 7.25 to 1.00 for the quarter ending January 2, 2027, before returning to the original 7.00 to 1.00 level for quarters ending April 3, 2027, and beyond.
This incremental increase in allowable leverage provides the company with additional headroom to navigate short-term challenges and volatility, particularly those stemming from working capital demands, supply chain constraints, and geopolitical uncertainties such as ongoing tariff risks.
Reduction in Revolving Credit Facility Size
As part of the amended agreement, the size of B&G Foods’ revolving credit facility will be reduced from $475 million to $430 million. While this reflects a tightening of available revolving capital, B&G Foods maintains ample liquidity to support its near-term operational needs and capital allocation priorities.
Importantly, the amendment introduces tighter controls on how available cash may be utilized for restricted debt payments, investments, and shareholder distributions. These controls are designed to reinforce fiscal discipline and align with the company’s broader goal of deleveraging its balance sheet over time.
Under the updated terms:
- The available amount of cash that can be used for restricted debt repayments and investments is capped, subject to a consolidated leverage ratio of 7.00 to 1.00 or lower—measured on the date an irrevocable redemption notice is issued (with a 90-day window for execution).
- For restricted payments such as dividends, the consolidated leverage ratio must be less than or equal to 7.25 to 1.00, calculated as of the dividend declaration date (also within a 90-day payment period).
These conditions aim to balance shareholder returns with prudent capital management and long-term financial sustainability.
Current Credit Utilization
As of June 28, 2025, the final day of B&G Foods’ second fiscal quarter, the company reported that $235 million in aggregate principal amount of revolving credit loans remained outstanding under its revolving credit facility. This indicates that B&G Foods has already drawn over half of the revised credit facility limit, reinforcing the importance of maintaining operational discipline and strategic allocation of liquidity resources.
Senior Notes Repurchase During Q2 2025
In addition to modifying its credit agreement, B&G Foods has continued to execute on its plan to reduce long-term debt by repurchasing a portion of its 5.25% senior notes due 2027. During the second quarter of 2025, the company repurchased $20.7 million in aggregate principal amount of these notes through open market transactions. The average repurchase price was approximately 89.98% of the face value, representing a discounted acquisition that allows the company to reduce its debt burden at a cost-effective rate.
Following these repurchases, $529.3 million in aggregate principal of the 5.25% senior notes remain outstanding as of June 28, 2025. These moves are consistent with B&G Foods’ stated goal of deleveraging through targeted debt reduction and restructuring efforts.
Leadership Commentary and Strategic Rationale
Bruce C. Wacha, Executive Vice President of Finance and Chief Financial Officer of B&G Foods, commented on the significance of the credit facility amendment and debt repurchase activity:
We believe that temporarily increasing our maximum consolidated leverage ratio is a prudent and necessary step in response to the current challenging consumer environment within the packaged foods industry. Amid persistent macroeconomic headwinds—including input cost inflation, retailer inventory adjustments, and uncertainty surrounding tariffs—this adjustment provides critical flexibility to manage our capital and meet our working capital needs.”
Wacha also emphasized the importance of the company’s strategic focus on portfolio optimization and cost discipline:
Our recent divestiture of the Don Pepino and Sclafani brands illustrates our continued commitment to reshaping the business by exiting non-core segments and sharpening focus on our core growth categories. These divestitures, along with our opportunistic repurchases of senior notes, demonstrate our dedication to reducing long-term debt while maintaining balance sheet strength. We are also undertaking internal initiatives to lower costs and drive efficiency across our operations.”
Portfolio Reshaping and Strategic Transformation
B&G Foods’ announcement comes shortly after it finalized the divestiture of two legacy brands—Don Pepino and Sclafani—which were sold as part of a strategic effort to streamline the brand portfolio and focus on higher-margin, scalable products. These divestitures are emblematic of the company’s shift away from fragmented or lower-growth segments toward a more concentrated and efficient operating model.
The company has made clear that it remains focused on enhancing shareholder value through a combination of operational improvements, disciplined capital investment, and capital structure optimization.
Market Context: Packaged Foods Industry Facing Crosscurrents
B&G Foods’ credit amendment comes amid a complex market backdrop for the broader food manufacturing sector. Consumer packaged goods companies continue to face a range of challenges, including:
- Shifting consumer preferences, especially towards private label and value brands
- Volatile commodity pricing impacting input costs
- Retailer destocking and cautious inventory management
- Interest rate volatility and tightened credit markets
- Uncertainty around trade policies and tariffs
These pressures have pushed many CPG companies to reevaluate their capital strategies, cut costs, and bolster liquidity. B&G Foods’ measured approach in amending its credit agreement reflects this industry-wide trend toward financial conservatism and proactive balance sheet management.
Strategic Focus on Cost Control and Debt Reduction
As B&G Foods continues to operate through a challenging macroeconomic cycle, the company is staying focused on its core financial priorities:
- Debt reduction through strategic asset sales and note repurchases
- Portfolio optimization to exit low-growth or non-core brands
- Cost containment efforts to preserve margins and strengthen free cash flow
- Maintaining flexibility under its revised credit facility while monitoring leverage ratios closely
By enacting these measures, B&G Foods is positioning itself for greater resilience and the ability to invest selectively in growth initiatives as market conditions improve.
About B&G Foods
B&G Foods, Inc. (NYSE: BGS) is a diversified food company with a portfolio of iconic brands that have been family favorites for generations. From pantry staples to frozen meals, B&G Foods’ products can be found in supermarkets and grocery stores throughout the United States, Canada, and Puerto Rico. The company remains focused on delivering value to consumers while pursuing operational excellence and disciplined financial stewardship.
About B&G Foods, Inc.
Based in Parsippany, New Jersey, B&G Foods and its subsidiaries manufacture, sell and distribute high-quality, branded shelf-stable and frozen foods across the United States, Canada and Puerto Rico. With B&G Foods’ diverse portfolio of more than 50 brands you know and love, including B&G, B&M, Bear Creek, Cream of Wheat, Crisco, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, Polaner, Spice Islands and Victoria, there’s a little something for everyone. For more information about B&G Foods and its brands, please visit www.bgfoods.com.
