8-KMaterial AgreementsFinancial EventsExhibits & Filings

Burlington Stores, Inc. 8-K Report, Material Agreement (Jul 2, 2018)

Filed July 2, 2018For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) announced a significant amendment to its existing credit agreement through its indirect wholly-owned subsidiary, Burlington Coat Factory Warehouse Corporation. Filed on July 2, 2018, this Second Amendment to the Second Amended and Restated Credit Agreement, dated June 29, 2018, primarily extends the maturity date of the revolving credit facility. This extension from August 13, 2019, to June 29, 2023, provides the company with enhanced financial flexibility and a longer runway for its operations and strategic initiatives. Beyond the maturity extension, the amendment also introduces more favorable pricing terms. The company can now access lower interest rates (1.25% for LIBOR loans and 0.25% for prime rate loans) by maintaining 40% average daily availability, a slightly reduced threshold compared to the previous 50%. Furthermore, the amendment addresses the discharge of mortgages and liens on real property and grants the company and its subsidiaries greater latitude in making investments, restricted payments, and repaying other debt. These changes collectively signal a strengthening of Burlington's credit profile and an improved ability to manage its capital structure.

Key Highlights

  • 1Extended the maturity date of the ABL Credit Agreement from August 13, 2019, to June 29, 2023.
  • 2Adjusted the pricing grid to allow for lower interest rates (1.25% for LIBOR, 0.25% for Prime) if average daily availability is at least 40% (down from 50%).
  • 3Discharged mortgages and liens on owned or leased real property for the Company and its guarantors.
  • 4Provided the Company and certain subsidiaries with additional flexibility for investments, restricted payments, and other debt repayments.
  • 5The amendment was entered into on June 29, 2018, by Burlington Coat Factory Warehouse Corporation, an indirect wholly-owned subsidiary.
  • 6Bank of America, N.A. and Wells Fargo Bank, National Association acted as joint lead arrangers and joint bookrunners.

Frequently Asked Questions

The primary impact is the extension of the credit facility's maturity date to June 29, 2023, providing the company with more financial stability and a longer horizon for its capital management and strategic planning. It also introduces more favorable interest rate pricing and greater flexibility in financial dealings.

This filing specifically addresses an amendment to an existing credit agreement, not the incurrence of new debt. The amendment provides more favorable terms and flexibility regarding the existing facility, rather than increasing the overall debt load.

While the filing does not detail specific costs, amendments to credit agreements typically involve arrangement fees or legal expenses. However, the more favorable pricing and increased flexibility could lead to potential cost savings on interest expense over time.

This means that any existing mortgages or liens that were previously placed on the company's real property (owned or leased) as collateral for the credit facility have been removed. This can simplify the company's asset encumbrance and potentially improve its balance sheet clarity.