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.