Does this new credit facility change Best Buy's available borrowing capacity?

No. The new Five-Year Facility Agreement permits borrowings of up to $1.25 billion, the same amount as the previous facility it replaces.

Why did Best Buy enter into a new facility before the old one expired?

The filing does not state a reason. It shows that the new agreement replaces the previous facility, which was scheduled to expire in April 2028, and extends the maturity to April 2030 on substantially the same terms.

Is Best Buy currently borrowing under this facility?

No amounts are currently outstanding under the Five-Year Facility Agreement, according to the filing.

How will borrowing costs under the facility be determined?

Borrowing costs are variable. The company may choose an ABR-based rate or Adjusted Term SOFR plus a margin. The margins and facility fee are based on the company's current senior unsecured debt rating, with the Term SOFR Margin ranging from 0.565% to 1.015% and the facility fee from 0.060% to 0.110%.

What restrictions does the facility place on Best Buy?

The agreement includes customary covenants restricting liens on certain assets, material changes in corporate structure or business nature, dispositions of material assets, mergers and fundamental changes, and certain affiliate transactions. It also requires the company to maintain a maximum quarterly cash flow leverage ratio.

BBY 8-K: Material Agreements & Financial Events

01—Abstract

Summary

Summary of the 8-K filed April 23, 2025. Cited figures are marked; the original filing is the authoritative source.

Best Buy Co., Inc. (BBY) disclosed in this Form 8-K that on April 18, 2025, it entered into a new $1.25 billion^a five-year senior unsecured revolving credit facility with U.S. Bank National Association as administrative agent, Bank of America, N.A. as syndication agent, and a syndicate of lenders.

The Five-Year Facility Agreement replaces the previous $1.25 billion^b senior unsecured revolving credit facility dated April 12, 2023, which was scheduled to expire in April 2028 and was terminated on April 18, 2025. The new facility terminates in April 2030, and no amounts are currently outstanding under it. The filing states that the new facility contains substantially the same terms as the previous facility.

Pricing is variable and depends on the company's current senior unsecured debt rating. Under the agreement, the ABR Margin ranges from 0.000%^c to 0.015%, the Term SOFR Margin ranges from 0.565% to 1.015%, and the facility fee ranges from 0.060% to 0.110%. The facility is guaranteed by certain specified subsidiaries and includes customary affirmative and negative covenants, including a maximum quarterly cash flow leverage ratio requirement.

Some lenders and their affiliates have other banking relationships with the company, including cash management, loans, foreign exchange, letters of credit, investment banking and trust services. For investors, the filing signals a routine refinancing and extension of committed liquidity rather than a change in borrowing capacity, with the facility size unchanged at $1.25 billion^d and maturity extended to 2030. The full agreement is filed as Exhibit 10.1.

02—Key points

Key Highlights

New $1.25 billion five-year senior unsecured revolving credit facility entered April 18, 2025, maturing April 2030.
Replaces the previous $1.25 billion facility dated April 12, 2023, which was scheduled to expire in April 2028 and was terminated April 18, 2025.
No amounts outstanding under the Five-Year Facility Agreement as of the filing.
Term SOFR Margin ranges from 0.565% to 1.015%; facility fee ranges from 0.060% to 0.110%, both based on the company's senior unsecured debt rating.
Facility contains substantially the same terms as the previous facility, including a maximum quarterly cash flow leverage ratio covenant.
Facility is guaranteed by certain specified subsidiaries and includes customary restrictions on liens, asset dispositions, mergers and affiliate transactions.
U.S. Bank National Association serves as administrative agent and Bank of America, N.A. as syndication agent.

03—Questions

Frequently Asked Questions

Does this new credit facility change Best Buy's available borrowing capacity?
No. The new Five-Year Facility Agreement permits borrowings of up to $1.25 billion, the same amount as the previous facility it replaces.
Why did Best Buy enter into a new facility before the old one expired?
The filing does not state a reason. It shows that the new agreement replaces the previous facility, which was scheduled to expire in April 2028, and extends the maturity to April 2030 on substantially the same terms.
Is Best Buy currently borrowing under this facility?
No amounts are currently outstanding under the Five-Year Facility Agreement, according to the filing.
How will borrowing costs under the facility be determined?
Borrowing costs are variable. The company may choose an ABR-based rate or Adjusted Term SOFR plus a margin. The margins and facility fee are based on the company's current senior unsecured debt rating, with the Term SOFR Margin ranging from 0.565% to 1.015% and the facility fee from 0.060% to 0.110%.
What restrictions does the facility place on Best Buy?
The agreement includes customary covenants restricting liens on certain assets, material changes in corporate structure or business nature, dispositions of material assets, mergers and fundamental changes, and certain affiliate transactions. It also requires the company to maintain a maximum quarterly cash flow leverage ratio.

04—Continue

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