What is the main purpose of this 8-K filing?

This 8-K filing announces that Lowe's Companies, Inc. has entered into a Second Amended and Restated Credit Agreement, which modifies and extends their existing revolving credit facility. The primary objective is to provide investors with information about this material definitive agreement.

How does this credit agreement affect Lowe's financial flexibility?

The agreement extends the maturity date of the $1.75 billion credit facility to October 25, 2016, giving Lowe's access to funds for a longer period. Additionally, the option to increase the facility by $500 million provides further flexibility for future needs.

Are there any outstanding borrowings under this new credit agreement?

As of the date of the filing (October 27, 2011), there were no outstanding borrowings under the Second Amended and Restated Credit Agreement. This indicates the company was not drawing on this facility at that time.

LOW 8-K: Material Agreements & Financial Events

Q: What are the key financial conditions or covenants associated with this credit agreement?

The agreement includes a significant financial covenant requiring Lowe's to maintain a consolidated adjusted funded debt to total capitalization ratio of 0.75 to 1.00 or lower. This demonstrates a commitment to prudent financial management and leverage control.

Summary

Lowe's Companies, Inc. (LOW) has announced a material definitive agreement through the entry into a Second Amended and Restated Credit Agreement. This updated agreement, dated October 25, 2011, restates and amends their existing $1.75 billion unsecured revolving credit facility. A key investor takeaway is the extension of the facility's maturity date from June 15, 2012, to October 25, 2016, providing greater financial flexibility and stability over a longer term. Additionally, the Company retains the option to increase the aggregate availability under the facility by an additional $500 million, subject to lender commitments. The terms of the agreement include interest rates based on either a base rate or a Eurodollar rate plus an applicable margin, which varies based on Lowe's credit ratings. The filing also details facility fees and letter of credit fees, which are contingent on credit ratings. Importantly, the agreement includes a financial covenant requiring Lowe's to maintain a consolidated adjusted funded debt to total capitalization ratio of 0.75 to 1.00 or lower, indicating a commitment to financial discipline.

Key Highlights

1Lowe's entered into a Second Amended and Restated Credit Agreement for a $1.75 billion unsecured revolving credit facility.
2The maturity date of the credit facility has been extended from June 15, 2012, to October 25, 2016.
3The Company has the option to increase the credit facility by an additional $500 million, subject to lender commitments.
4Interest rates are based on either a base rate or Eurodollar rate, with applicable margins on Eurodollar borrowings ranging from 0.450% to 1.000% based on credit ratings.
5Facility fees range from 0.050% to 0.125% annually, and letter of credit fees range from 0.450% to 1.000% annually, both dependent on credit ratings.
6A key financial covenant requires Lowe's to maintain a consolidated adjusted funded debt to total capitalization ratio of 0.75 to 1.00 or lower.
7There were no outstanding borrowings under the credit agreement as of the filing date.

LOWES COMPANIES INC 8-K Report, Material Agreement (Oct 28, 2011)

Summary

Key Highlights

Frequently Asked Questions