Summary
Lowe's Companies, Inc. (LOW) has entered into an Amended and Restated Credit Agreement, establishing a $2 billion unsecured revolving credit facility that matures on September 1, 2028. This new agreement amends and restates the prior credit facility from March 2020. The facility offers flexibility, including the option to increase availability by an additional $500 million, subject to lender commitments and other conditions. Investors should note the terms of the credit agreement, including interest rate options (Base Rate or Term SOFR plus applicable margins) and associated fees. At Lowe's current credit ratings, the applicable margin for a Base Rate Loan is 0.000% and for a Term SOFR Loan is 0.910%. A facility fee of 0.090% and a letter of credit fee of 0.910% are applicable at current ratings. The agreement also includes customary covenants, such as maintaining a Consolidated Adjusted Funded Debt to Consolidated EBITDAR ratio not exceeding 4.00 to 1.00, and standard events of default, including cross-default and change of control provisions.
Key Highlights
- 1Lowe's entered into a $2 billion unsecured revolving credit agreement, maturing in September 2028.
- 2The new credit agreement amends and restates a prior agreement from March 2023.
- 3The company has the option to increase the credit facility by an additional $500 million.
- 4Interest rates are based on Base Rate or Term SOFR, plus an applicable margin that varies with credit ratings.
- 5Current credit ratings imply a 0.000% margin for Base Rate loans and 0.910% for Term SOFR loans.
- 6A facility fee of 0.090% and a letter of credit fee of 0.910% are applicable at current credit ratings.
- 7The agreement includes a financial covenant requiring a debt-to-EBITDAR ratio not to exceed 4.00x, along with standard default provisions.