8-KMaterial AgreementsFinancial EventsExhibits & Filings

Burlington Stores, Inc. 8-K Report, Material Agreement (Dec 22, 2021)

Filed December 22, 2021For Securities:BURL

Summary

Burlington Stores, Inc. (BURL), through its subsidiary Burlington Coat Factory Warehouse Corporation, has executed a Third Amendment to its Second Amended and Restated Credit Agreement, dated December 22, 2021. This amendment primarily focuses on enhancing the company's financial flexibility and reducing its borrowing costs. Key changes include an increase in the aggregate principal amount of commitments from $600 million to $650 million and an extension of the maturity date for these commitments and loans from June 29, 2023, to December 22, 2026. Furthermore, the amendment introduces reduced interest rate margins across the ABL facility, contingent on average daily availability. These cost savings are expected to improve the company's profitability. The agreement also grants Burlington Stores increased flexibility regarding debt incurrence, asset disposals, investments, restricted payments, and compliance with financial covenants, which are all positive indicators for operational agility and strategic execution.

Key Highlights

  • 1Increased credit facility commitment from $600 million to $650 million.
  • 2Extended the maturity date of the credit facility from June 29, 2023, to December 22, 2026.
  • 3Reduced interest rate margins on the ABL facility, with specific reductions tied to average daily availability.
  • 4Provided greater flexibility for incurring debt and liens.
  • 5Enhanced flexibility for asset dispositions and investments.
  • 6Increased capacity for restricted payments and repayments of other debt.
  • 7Improved compliance with financial covenants and the ABL credit agreement terms.

Frequently Asked Questions

The main purpose of the amendment is to increase Burlington Stores' borrowing capacity, extend the maturity of its credit facility, reduce borrowing costs through lower interest rates, and provide greater operational and financial flexibility for future activities such as debt incurrence, investments, and asset management.

The amendment increases the total commitment under the credit facility by $50 million to $650 million and pushes out the maturity date by over three years, from mid-2023 to the end of 2026. This provides a longer runway for the company to manage its debt obligations and fund its operations.

Yes, the amendment includes a reduction in the interest rate margins applied to the company's ABL facility. The exact reduction depends on the company's average daily availability, but it offers a lower cost of borrowing in various scenarios, which can positively impact net interest expense.

The amendment grants Burlington Stores and certain subsidiaries more leeway in areas such as incurring additional debt and liens, disposing of assets, making strategic investments, executing restricted payments, and repaying other debts. It also eases compliance with financial covenants, allowing the company to pursue growth and operational strategies with fewer immediate constraints.