Summary
Ross Stores, Inc. has executed a new, senior unsecured revolving Credit Facility, referred to as the "2022 Credit Facility," totaling up to $1.3 billion. This facility, effective February 17, 2022, significantly expands the company's previous $800 million credit line and extends its maturity to February 2027, with options for extensions. The new facility provides greater financial flexibility for the company's operations and strategic initiatives. As of the filing date, no borrowings were outstanding under this new facility, indicating a strong liquidity position.
Key Highlights
- 1Ross Stores, Inc. secured a new $1.3 billion unsecured revolving Credit Facility (2022 Credit Facility), replacing the prior $800 million facility.
- 2The 2022 Credit Facility matures in February 2027, with potential extensions for up to two additional one-year periods.
- 3The facility includes an option to increase the borrowing capacity by an additional $700 million, subject to lender agreement.
- 4Interest rates on borrowings are variable, based on Term SOFR or an alternate benchmark rate plus an applicable margin that depends on the company's credit rating.
- 5The facility contains a $300 million sublimit for standby letters of credit.
- 6Key covenants include a Consolidated Adjusted Debt to Consolidated EBITDAR ratio, with progressively tighter limits over fiscal years 2022 and 2023.
- 7The prior $800 million credit facility was terminated concurrently with the establishment of the new facility.
Frequently Asked Questions
The primary purpose of this 8-K filing is to announce that Ross Stores, Inc. has entered into a new, larger, and more flexible senior unsecured revolving Credit Facility, replacing its previous credit line. This demonstrates the company's proactive management of its financial resources and debt structure.
The new $1.3 billion facility provides Ross Stores with increased borrowing capacity and extended maturity, offering greater financial flexibility for operations, potential acquisitions, or managing working capital needs. The expanded size and improved terms suggest favorable credit conditions for the company.
The new facility includes a Consolidated Adjusted Debt to Consolidated EBITDAR ratio covenant, which will become more restrictive over time, and limitations on subsidiary indebtedness, asset sales, and liens. These covenants are standard for corporate credit facilities and aim to ensure the company maintains a healthy financial profile.
No, as of the Effective Date of the 2022 Credit Facility (February 17, 2022), no borrowings were outstanding under the new facility or the previously terminated one. This indicates the company had sufficient liquidity without needing to draw on this credit line at that time.