01—Abstract
Summary
Summary of the 8-K filed May 23, 2025. Cited figures are marked; the original filing is the authoritative source.
On May 22, 2025, Tapestry, Inc. entered into a definitive agreement to refinance and replace its existing unsecured revolving credit facility dated May 11, 2022 with a new $2 billiona unsecured revolving credit facility.
Bank of America, N.A. serves as administrative agent, with a syndicate of banks and financial institutions as lenders. The new facility matures on May 22, 2030, and may be used for working capital, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes, including commercial paper back-up. Key terms include an accordion feature allowing commitments to be increased by up to $750 millionb, multi-currency borrowing in Euros, Pounds Sterling, Japanese Yen and U.S. Dollars, and sublimits of $125 million for standby letters of credit and $50 million for swing line loans.
Pricing is determined by a grid tied to a Gross Leverage Ratio (consolidated debt to consolidated EBITDAR), and the company will pay quarterly facility fees. Prepayments and commitment reductions may be made without premium or penalty, other than customary breakage costs. The agreement contains customary negative covenants and a quarterly maximum leverage ratio of 4.0 to 1.0 (consolidated debt minus unrestricted cash above $300 millionc, to consolidated EBITDAR), which may rise to 4.5 to 1.0 following a material acquisition, subject to limitations.
Standard events of default are included, along with a change of control provision. The filing also notes that certain affiliates of the lenders served as agents and/or lenders under the Existing Credit Facility. The company filed the full credit agreement as Exhibit 10.1, with certain annexes and schedules omitted under Item 601(a)(5) of Regulation S-K.
02—Key points
Key Highlights
- Entered a new $2 billion unsecured revolving credit facility on May 22, 2025, replacing the Existing Credit Facility dated May 11, 2022.
- New facility matures May 22, 2030, with Bank of America, N.A. as administrative agent.
- Accordion feature allows revolving commitments to be increased by up to $750 million, subject to conditions.
- Multi-currency borrowing available in U.S. Dollars, Euros, Pounds Sterling and Japanese Yen; sublimits of $125 million for standby letters of credit and $50 million for swing line loans.
- Pricing is based on a grid tied to the Gross Leverage Ratio; quarterly facility fees apply to the full commitment amount.
- Maximum leverage covenant of 4.0 to 1.0 (net of unrestricted cash above $300 million), increasable to 4.5 to 1.0 after a material acquisition.
- Facility permits prepayment and commitment reduction without premium or penalty, other than customary breakage costs.
03—Questions
Frequently Asked Questions
What did Tapestry do in this filing?
Tapestry entered into a definitive agreement to refinance and replace its existing unsecured revolving credit facility with a new $2 billion unsecured revolving credit facility, and terminated the prior facility as part of that replacement.
When does the new revolving credit facility mature?
The New Revolving Credit Facility matures on May 22, 2030.
What can the proceeds of the new facility be used for?
Borrowings may finance working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes of the company and its subsidiaries, including commercial paper back-up.
What financial covenant applies to the facility?
The company must comply quarterly with a maximum 4.0 to 1.0 ratio of consolidated debt minus unrestricted cash and cash equivalents in excess of $300 million to consolidated EBITDAR, which may increase to 4.5 to 1.0 following a material acquisition, subject to certain limitations.
Can the company prepay the facility without penalty?
Yes. Loans may be prepaid and commitments may be terminated or reduced without premium or penalty, other than customary breakage costs.
04—Continue