Summary
Lowe's Companies Inc. (LOW) has filed an 8-K report detailing the entry into a $250 million unsecured 364-day credit agreement on September 9, 2019. This agreement provides Lowe's with flexible short-term financing options, denominated in multiple currencies, with a maturity date of September 8, 2020. The company has the option to convert outstanding loans into a term loan, repayable one year later, subject to certain conditions and fees. This new credit facility offers important liquidity and operational flexibility. The interest rates are tied to the company's credit ratings, with margins on Base Rate Loans ranging from 0.000% to 0.15% and on Eurocurrency Rate Loans from 0.720% to 1.15%. Additionally, a facility fee of 0.030% to 0.100% per annum on aggregate commitments is payable. The agreement includes customary covenants, such as a financial ratio requirement for Consolidated Adjusted Funded Debt to Consolidated EBITDAR not to exceed 4.00 to 1.00, and standard events of default, including cross-default and change of control provisions. As of the filing date, there were no outstanding borrowings under this agreement.
Key Highlights
- 1Lowe's entered into a new $250 million unsecured 364-day credit agreement on September 9, 2019.
- 2The credit agreement matures on September 8, 2020, with an option to convert to a one-year term loan.
- 3Borrowings can be denominated in USD, EUR, Sterling, CAD, and other approved currencies.
- 4Interest rates vary based on credit ratings, with applicable margins on Base Rate Loans from 0.000% to 0.15% and Eurocurrency Rate Loans from 0.720% to 1.15%.
- 5A facility fee of 0.030% to 0.100% per annum on aggregate commitments is payable, regardless of borrowings.
- 6A key financial covenant requires Consolidated Adjusted Funded Debt to Consolidated EBITDAR to not exceed 4.00 to 1.00.
- 7The agreement includes standard provisions for events of default, such as cross-default and change of control.