Summary
The TJX Companies, Inc. (TJX) has announced the entry into a new $500.0 million senior unsecured revolving credit facility with a 364-day maturity, effective August 10, 2020. This new facility, alongside existing facilities, increases the company's total available borrowing capacity to $1.5 billion. Importantly, TJX prepaid its $1.0 billion in outstanding revolving credit loans on July 29, 2020, meaning the company currently has no outstanding revolving credit debt and significant liquidity available. This move provides TJX with substantial financial flexibility as it navigates the ongoing economic environment. The terms of the new facility include specific leverage ratio covenants and minimum liquidity requirements, indicating a focus on maintaining a strong financial position. Investors should note the company's proactive approach to managing its debt and ensuring access to capital.
Key Highlights
- 1TJX entered into a new $500.0 million, 364-day revolving credit facility.
- 2The new facility brings the company's total available borrowing capacity to $1.5 billion.
- 3TJX prepaid its $1.0 billion in existing revolving credit loans on July 29, 2020.
- 4The company currently has no outstanding revolving credit debt.
- 5The new credit facility has specific leverage ratio covenants (e.g., funded debt to EBITDAR of 5.00:1.00 initially).
- 6Minimum liquidity of $1.5 billion is required under the new facility until April 30, 2021.
- 7Interest rates on borrowings range from LIBOR + 110-190 bps or Base Rate + 10-90 bps, plus a quarterly facility fee.