8-KMaterial AgreementsFinancial EventsExhibits & Filings

LOWES COMPANIES INC 8-K Report, Material Agreement (Nov 28, 2016)

Filed November 28, 2016For Securities:LOW

Summary

Lowe's Companies, Inc. filed an 8-K report on November 28, 2016, to announce the execution of a $1.75 billion, five-year unsecured revolving credit agreement, effective November 23, 2016. This agreement amends and restates a previous credit facility, primarily to extend the maturity date, introduce a multicurrency subfacility, and adjust lender commitments. The company also retains the option to increase the facility by an additional $500 million, subject to lender commitments and other conditions. This updated credit facility provides Lowe's with significant financial flexibility and reinforces its access to capital. The inclusion of a multicurrency subfacility is particularly noteworthy, suggesting potential international operations or foreign currency hedging needs. Investors should view this as a positive development, indicating sound financial management and preparedness for future operational requirements.

Key Highlights

  • 1Lowe's entered into a $1.75 billion, five-year unsecured revolving credit agreement on November 23, 2016.
  • 2The agreement amends and restates a prior credit facility dated August 29, 2014.
  • 3Key amendments include extending the maturity date, adding a multicurrency subfacility, and modifying lender commitments.
  • 4Lowe's has the option to increase the total facility size by an additional $500 million.
  • 5The credit agreement includes options for borrowing in various currencies such as USD, Euro, Sterling, and Canadian Dollar.
  • 6Interest rates are based on the Base Rate or Eurocurrency Rate, plus an applicable margin that varies with the company's credit ratings.
  • 7The agreement contains customary covenants, including a financial covenant related to the ratio of Consolidated Adjusted Funded Debt to Consolidated EBITDAR (not to exceed 4.00 to 1.00).

Frequently Asked Questions

The primary purpose of this 8-K filing is to report Lowe's Companies, Inc.'s entry into a material definitive agreement, specifically a $1.75 billion amended and restated credit agreement.

The new credit agreement extends the maturity date of the revolving credit facility, adds a multicurrency subfacility to allow for borrowing in different currencies, and modifies the revolving commitments of the lenders.

Yes, Lowe's has the option to increase the aggregate availability under the facility by an additional $500 million, subject to obtaining commitments from the lenders and satisfying other conditions specified in the agreement.

Borrowings will bear interest based on either a Base Rate or a Eurocurrency Rate, plus an applicable margin that depends on Lowe's credit ratings. The company also pays a facility fee on the aggregate commitments and a letter of credit fee on outstanding letters of credit. At the time of the filing, with Lowe's current credit ratings, the applicable margin for a Base Rate Loan was 0.000%, for a Eurocurrency Rate Loan was 0.910%, the facility fee was 0.090%, and the letter of credit fee was 0.910%.