US Foods Closes $810 Million Term Loan At A Lower Rate, Retiring Its 2028 Debt Wall
The food distributor signed a seven-year secured term loan on Friday, cutting its interest margin by 0.25 percentage points and eliminating its nearest maturity.
US Foods closed an $810 million secured term loan on Friday, using the proceeds to retire its nearest debt maturity and trim borrowing costs in a transaction the company structured as a mix of new cash and a direct exchange by existing lenders.
What The 8-K Says
The deal is the fourteenth amendment to a term loan credit agreement US Foods originally entered in June 2016. Under the new tranche, the company pays interest at Term SOFR plus 1.50% — a margin 0.25 percentage points below the 1.75% spread on the term loans it replaced, according to the 8-K filed Friday. The loan matures October 2, 2033, giving the company a seven-year runway.
The structure split the $810 million between two sources. Citibank, N.A. committed $359 million as the new term loan lender, while existing lenders holding the old debt rolled roughly $451 million on a cashless basis — exchanging their positions directly into the new tranche rather than receiving repayment and reinvesting. Citicorp North America, Inc. serves as administrative and collateral agent.
The new loan amortizes at 1% per year in equal quarterly installments, with the remaining balance due at maturity. Borrowers can prepay voluntarily without penalty, with one exception: any repricing transaction within six months of closing triggers a 1% prepayment premium.
Where The Money Went
Proceeds from the new facility, combined with cash on hand, went to four places. First, the company fully retired its term loans that had been scheduled to mature in November 2028 — eliminating that maturity entirely. Second, it made a partial prepayment on the term loans due October 2031. Third, it paid down a portion of its revolving credit facility. Fourth, it covered related fees and expenses, according to the fourteenth amendment.
The partial prepayment on the 2031 loans amounted to $100 million — and the filing specifies that this amount exceeded all remaining scheduled quarterly amortization payments on that tranche before its maturity date. The practical effect: no further quarterly amortization payments are due on those 2031 loans until the loan itself comes due.
The obligations under the new term loan are guaranteed by certain subsidiaries and secured by all the capital stock of the company and its subsidiaries, as well as substantially all non-real estate assets of the company and certain subsidiaries.
What It Changes For Holders
The transaction reshapes US Foods' debt calendar in two concrete ways. The 2028 maturity — the company's nearest term loan due date before this deal — is gone. The 2031 loans remain, but their quarterly cash drain has been eliminated ahead of schedule, freeing up cash flow between now and October 2031.
The margin reduction, while modest at 0.25 percentage points, applies to an $810 million principal balance, so the annual interest saving runs to roughly $2 million at current rates — a figure the filing does not state explicitly but that follows directly from the disclosed spread change and principal amount.
The credit agreement carries standard covenants limiting the company's ability to take on additional debt, pay dividends, repurchase stock, make certain investments, or sell substantially all of its assets. It also restricts mergers. Those constraints are unchanged in kind from prior versions of the agreement.
USFD shares were flat in Friday after-hours trading at $96.92, unchanged from the regular-session close, according to market data.
What To Watch
With the 2028 maturity fully retired and the 2031 loan's quarterly amortization eliminated, the next question is how US Foods deploys the cash flow it has freed up — whether toward further debt reduction, acquisitions, or other uses. The next major maturity on the term loan side is now October 2031, giving the company roughly five years before that obligation comes due.
The 8-K was signed by Dirk J. Locascio, chief financial officer of US Foods Holding Corp., and filed Friday, October 2, 2026 — the same day the amendment took effect.
