Summary
On May 1, 2020, Ross Stores, Inc. (ROST) announced an 8-K filing detailing significant actions taken to bolster its financial flexibility amidst the uncertain market conditions presented by the COVID-19 pandemic. The company entered into a new, unsecured 364-Day Credit Facility providing up to $500 million in additional borrowing capacity. This new facility, along with amendments to its existing credit agreement, aims to ensure adequate liquidity and operational resilience during this challenging period. The amendments to the existing credit facility are particularly noteworthy, as they adjust key financial covenants. Specifically, the reporting of the Consolidated Adjusted Debt to EBITDAR ratio is deferred until the fiscal quarter ending January 30, 2021, and a minimum liquidity requirement of $800 million has been established. These adjustments, along with the new credit line, underscore the company's proactive approach to managing its financial health and maintaining operational flexibility.
Key Highlights
- 1Secured a new, unsecured 364-Day Credit Facility with a total borrowing availability of up to $500 million.
- 2Entered into an amendment to its existing credit agreement, modifying key financial covenants.
- 3The new credit facility is designed to enhance financial flexibility and liquidity due to COVID-19 pandemic impacts.
- 4The amendment to the existing credit facility removes the Consolidated Adjusted Debt to EBITDAR Ratio test prior to the fiscal quarter ending January 30, 2021.
- 5A minimum liquidity requirement of $800 million (cash and borrowing availability) is now in place under both facilities.
- 6Restrictions on subsidiary indebtedness, general liens, and stock repurchases are detailed within the new credit agreement.
- 7As of the effective date, no borrowings were outstanding under the new 364-Day Credit Facility.