| Item 1.01. | Entry into a Material Definitive Agreement. |
Amendment to Revolving Credit Agreement
On August 2, 2024 (the “Amendment Effective Date”), V.F. Corporation (the “Company” or “VF”) entered into an amendment (the “Revolver Amendment”) to its $2.25 billion senior unsecured revolving credit facility agreement that expires November 2026 (the “Revolving Credit Facility”). The Revolver Amendment amends: (x) the definition of “Consolidated Net Worth” to increase the aggregate amount of all non-cash impairment charges included in determining Consolidated Net Worth as of the last day of each fiscal quarter after March 31, 2024 and ending on or about, or prior to, September 30, 2025, to $1,375,000,000 and (y) the general lien basket by prohibiting the Company from using such basket to grant liens on its current assets.
The foregoing description of the terms of the Revolver Amendment is not a complete description thereof and is qualified in its entirety by the full text of such agreement which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Amendment to Delayed Draw Term Loan Agreement
On the Amendment Effective Date, the Company entered into an amendment (the “DDTL Amendment”) to its $1 billion delayed draw term loan agreement that expires December 2024. The DDTL Amendment amends: (v) the definition of “Consolidated Net Worth” to include, for any fiscal quarter ending on or about June 30, 2024 or at any time thereafter and prior to the last day of the “Covenant Modification Period” (which is defined as the date on which the Company shall have delivered a written notice of its desire to terminate the Covenant Modification Period and certified that the Company would be in compliance with the Consolidated Net Indebtedness to Consolidated Net Capitalization financial covenant (the “Financial Covenant”) as of the last day of the fiscal quarter most recently ended), with Consolidated Net Worth being determined as the consolidated stockholders’ equity of the Company and its subsidiaries, determined on a consolidated basis in accordance with GAAP and solely for purposes of calculating the Financial Covenant, addbacks for (i) any non-cash impairment charges (other than Specified Charges), as of the last day of the fiscal quarter incurred and each of the four immediately succeeding fiscal quarters and (ii) any Specified Charges (defined as any non-cash impairment charges that have been recognized by the Company (A) that have been disclosed by the Company to the administrative agent prior to the Amendment Effective Date and recognized by the Company or any of its subsidiaries during the period commencing with the fiscal quarter ended on or about September 30, 2022 and ending with the fiscal quarter ended on or about March 31, 2024 and (B) the amount of the write-off of income tax receivable recognized by the Company or its subsidiaries during the fiscal quarter ended on or about September 30, 2023 as a result of IRS disputes that have been disclosed by the Company to the administrative agent prior to the Amendment Effective Date), as of the last day of the fiscal quarter incurred and each of the eight immediately succeeding fiscal quarters, in each case, recognized by the Company or any of its subsidiaries at any time commencing with the fiscal quarter ended on or about September 30, 2022; provided that the aggregate amount of all such charges in determining Consolidated Net Worth as of the last day of any fiscal quarter may not exceed (i) for purposes of determining Consolidated Net Worth as of the last day of the fiscal quarter ended on or about June 30, 2024 and as of the last day of each subsequent fiscal quarter ending on or about, or prior to September 30, 2025,, $1,375,000,000 and (ii) for purposes of determining Consolidated Net Worth as of the last day of any subsequent fiscal quarter, $500,000,000; (w) the definition of “Applicable Rate” to (i) include five additional ratings categories if the senior, unsecured, long-term indebtedness of the Company is rated (A) A- and A3 by S&P and Moody’s, respectively, (B) BBB+ and Baa1 by S&P and Moody’s, respectively, (C) BBB and Baa2 by S&P and Moody’s, respectively, (D) BBB- and Baa3 by S&P and Moody’s, respectively or (E) BB+ and Ba1 or lower, by S&P and Moody’s, respectively and (ii) increase the first three rating categories to (A) AA- and Aa3 by S&P and Moody’s, respectively, (B) A+ and A1 by S&P and Moody’s, respectively and (C) A and A2 by S&P and Moody’s, respectively; (x) the prepayment provisions to require that the Company to prepay the loans with the net cash proceeds of certain asset sales, the incurrence of certain indebtedness and certain equity issuances; (y) the negative covenants by adding additional restrictions, with effect prior to the end of the Covenant Modification Period, on (i) certain agreements and other arrangements that prohibit or impose conditions on the ability of the Company and its domestic subsidiaries to grant liens on their assets to secure or to provide guarantees in respect of the obligations under the Revolving Credit Facility, (ii) certain dividends, distributions and payments with respect to any equity interests of the Company, and (iii) reducing availability under certain liens and indebtedness baskets prior to the end of the Covenant Modification Period; and (z) the general lien basket by prohibiting the Company from using such basket to grant liens on its current assets.
