8-KMaterial AgreementsExhibits & Filings

CHIPOTLE MEXICAN GRILL INC 8-K Report, Material Agreement (May 8, 2020)

Filed May 8, 2020For Securities:CMG

Summary

Chipotle Mexican Grill, Inc. (CMG) filed an 8-K on May 8, 2020, to report the entry into a new senior, unsecured 364-Day Revolving Credit Agreement. This agreement establishes a $600 million revolving credit facility, maturing on May 7, 2021, and is guaranteed by certain material domestic subsidiaries. The facility provides financial flexibility for short-term needs and operational liquidity. The credit facility includes provisions for interest rates based on LIBOR plus a spread, a commitment fee on undrawn amounts, and specific financial covenants. These covenants include maintaining a maximum total leverage ratio of 3.00x, a minimum fixed charge coverage ratio of 1.50x, and restrictions on capital expenditures through December 31, 2020, to $350 million. The agreement also contains standard covenants related to liens, debt, investments, and mergers, alongside customary events of default.

Key Highlights

  • 1Entered into a new $600 million senior, unsecured 364-Day Revolving Credit Agreement on May 8, 2020.
  • 2The credit facility matures on May 7, 2021, providing short-term liquidity.
  • 3The facility includes a letter of credit sub-facility of up to $20 million.
  • 4Interest rates will be based on LIBOR plus an initial spread of 1.50%, with LIBOR subject to a floor of 1.00%.
  • 5A commitment fee of 0.625% will be paid on undrawn amounts.
  • 6Key financial covenants include a maximum total leverage ratio of 3.00x and a minimum fixed charge coverage ratio of 1.50x.
  • 7Capital expenditures are restricted to $350 million through December 31, 2020, with subsequent allowances tied to leverage ratios.

Frequently Asked Questions

The primary purpose of the new credit agreement is to provide Chipotle with financial flexibility and liquidity through a $600 million revolving credit facility. This facility can be used to meet short-term funding needs or for general corporate purposes.

The new revolving credit facility matures on May 7, 2021, which is 364 days from the agreement date.

Yes, the agreement includes financial covenants such as maintaining a maximum total leverage ratio of 3.00x and a minimum fixed charge coverage ratio of 1.50x. It also restricts capital expenditures to $350 million through December 31, 2020, and includes limitations on incurring debt, making investments, and other corporate actions.

The main parties involved are Chipotle Mexican Grill, Inc. as the borrower, JPMorgan Chase Bank, N.A. as the administrative agent, and various lenders and joint bookrunners/lead arrangers including JPMorgan Chase Bank, N.A., Morgan Stanley MUFG Loan Partners, LLC, Truist Bank, and Fifth Third Bank, N.A.