8-KMaterial AgreementsFinancial EventsExhibits & Filings

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

Filed November 8, 2018For Securities:BURL

Summary

Burlington Stores, Inc. (BURL) filed an 8-K on November 8, 2018, primarily announcing an amendment to its Term Loan Credit Agreement. This amendment, executed on November 2, 2018, by its subsidiary Burlington Coat Factory Warehouse Corporation, significantly lowers the interest rate margins on the company's term loan facility. Specifically, the interest rate margin for prime rate loans was reduced from 1.50% to 1.00%, and for LIBOR loans, it was reduced from 2.50% to 2.00%, with a 0.00% LIBOR floor. This renegotiation of debt terms suggests a proactive approach by management to improve the company's cost of capital.

Key Highlights

  • 1Burlington Stores' subsidiary, Burlington Coat Factory Warehouse Corporation, entered into Amendment No. 7 to its Term Loan Credit Agreement on November 2, 2018.
  • 2The amendment reduces the interest rate margins on the company's term loan facility.
  • 3Prime rate loan margins decreased from 1.50% to 1.00%.
  • 4LIBOR loan margins decreased from 2.50% to 2.00%.
  • 5A 0.00% LIBOR floor was established for LIBOR loans.
  • 6The company incurred fees and expenses related to the amendment, including a 0.125% fee to consenting lenders.
  • 7The filing incorporates this information into Item 2.03 concerning direct financial obligations.

Frequently Asked Questions

The primary purpose of Amendment No. 7 is to reduce the interest rate margins on Burlington Stores' existing term loan facility. This move is expected to lower the company's borrowing costs.

The reduction in interest rates will directly lower the company's interest expense, which can lead to improved profitability and potentially higher earnings per share. It also indicates a favorable credit profile for the company, allowing for renegotiation of debt terms.

Yes, Burlington Stores paid fees and expenses in connection with the amendment. This included a specific fee of 0.125% of the aggregate principal amount of the lender's loans to each consenting lender.

This amendment pertains to an existing Term Loan Credit Agreement dated February 24, 2011. It is a modification of the terms of previously issued debt, specifically focusing on reducing the interest rate, rather than incurring entirely new debt.