Coke Florida founder Troy Taylor renews $350 million credit line

Coca-Cola Beverages Florida has renewed a $350 million revolving credit facility that drew more demand from banks than the company sought, and brought a new lender into its syndicate in the process.

The five-year facility replaces an agreement of the same size and carries a $200 million accordion feature, allowing the bottler to increase the commitment later without renegotiating the whole arrangement. Borrowings will be priced at the secured overnight financing rate plus 0.75% to 1.25%, depending on the company's leverage.

It is unsecured, meaning the banks are lending against the business itself rather than against specific assets pledged as collateral.

Troy Taylor, chairman and chief executive, said the facility would fund investment in facilities, fleet, automation and digital capability. "The additional capacity will support investments in our facilities, fleet, automation and digital capabilities, while ensuring we have the resources to serve our customers, create opportunities for our associates and continue building a stronger business for the future," he said.

Paul Pheffer, the chief financial officer, drew attention to the reception. "The oversubscribed facility brought a new banking partner into our syndicate and, together with our BBB+ credit rating, provides the liquidity and flexibility to fund strategic investments and create long-term value for Coke Florida," he said.

That combination is unusual for a private company. A BBB+ rating places Coke Florida in investment grade territory, which is where large listed corporations sit rather than family or founder-controlled businesses, and it is what allows the company to borrow unsecured at a margin barely above the benchmark rate.

Citibank, PNC Capital Markets and BofA Securities acted as joint lead arrangers and joint bookrunners. Citibank will serve as administrative agent, with PNC Bank and Bank of America as co-syndication and co-documentation agents. BMO Bank, Huntington National Bank and Northern Trust also participated.

What the money is for

The reference to automation follows a substantial capital commitment earlier this year.

Coke Florida opened a distribution centre in Orlando in June, an $84 million facility on Eunice Avenue fitted with automated warehouse technology intended to improve order accuracy and service levels. The company described it as an investment in one of the fastest-growing regions in the state.

The business holds an exclusive Coca-Cola bottling territory covering 47 counties in Florida, making it one of the largest Coca-Cola bottlers in the United States. It produces and distributes sparkling soft drinks, waters, teas, sports drinks, energy drinks, juices and dairy beverages.

It employs more than 5,000 people across four production facilities and eighteen distribution centres, all four plants carrying GreenCircle certification.

Eleven years old

Taylor founded the company in 2015 and headquartered it in Tampa. It describes itself as one of the largest Black-owned businesses in the United States.

The recognition has followed. Deloitte Private and the Wall Street Journal named it a US Best Managed Company for the fifth consecutive year in May, awarding it Gold Standard status. Newsweek listed it among America's Greatest Workplaces for Parents and Families this year.

Bottling is a capital-intensive business with thin margins, dependent on territory rights granted by the Coca-Cola Company and on the ability to fund plant, vehicles and warehousing continuously. Reaching investment grade and renewing a $350 million unsecured line into oversubscribed demand is a measure of how the banks now view a company that did not exist eleven years ago.

Coke Florida did not disclose the size of the excess demand, or name the bank that joined the syndicate.