| Item 1.01. | Entry into a Material Definitive Agreement. |
On April 11, 2022, The William Carter Company, a wholly owned subsidiary of Carter’s, Inc. (the “Company”), entered into Amendment No. 4 to Fourth Amended and Restated Credit Agreement and Second Amendment to Amended and Restated Security Agreement (“Amendment No. 4”) related to its fourth amended and restated secured revolving credit agreement dated as of August 25, 2017, which was previously amended by Amendment No. 1, dated September 21, 2018, Amendment No. 2, dated May 4, 2020, and Amendment No. 3, dated April 21, 2021 (collectively, the “Secured Revolving Credit Agreement”). Capitalized terms used in the description below but not defined herein have the meanings given to such terms in Amendment No. 4.
Among other things, Amendment No. 4 provides:
| | • | | for a maturity extension to April 11, 2027, subject to a springing maturity of December 14, 2026 (which springing maturity shall occur, unless, prior to December 14, 2026, the aggregate outstanding principal amount of the Company’s 2027 Notes is less than or equal to $250.0 million or the 2027 Notes have otherwise been refinanced with Qualifying 2027 Notes Refinancing Indebtedness); |
| | • | | that the size of the U.S. Dollar revolving credit facility was increased by $100.0 million and, as a result of such increase, the size of the U.S. Dollar revolving credit facility is now in the aggregate principal amount of $750.0 million (including a $100.0 million sub-limit for letters of credit and a swing-line sub-limit of $70 million) and the size of the U.S. Dollar and multicurrency revolving credit facilities is now in the aggregate principal amount of $850.0 million (i.e., a $100.0 million multicurrency revolving commitment); |
| | • | | for SOFR, SONIA or other customary replacement benchmark floating rates; |
| | • | | for a leverage-based pricing grid which will determine the applicable interest rate (i.e., the applicable floating benchmark rate plus a credit spread adjustment, if any, plus an amount ranging from 1.125% to 1.625%); and |
| | • | | for a sole financial maintenance covenant consisting of a consolidated total net leverage ratio (defined as, with certain adjustments, the ratio of the U.S. Borrower’s consolidated net indebtedness to consolidated net income before interest, taxes, depreciation and amortization) not to exceed 3.50:1.00 (or 4.00:1.00, in the event of a material acquisition to the extent described in Amendment No. 4) as of the last day of a fiscal quarter, commencing with the third fiscal quarter of fiscal year ending December 31, 2022. |
Amendment No. 4 was entered into by and among The William Carter Company, as U.S. Borrower, The Genuine Canadian Corp., as Canadian Borrower, Carter’s Holdings B.V., as Dutch Borrower, JPMorgan Chase Bank, N.A., as Administrative Agent, Collateral Agent, U.S. Dollar Facility Swing Line Lender and U.S. Dollar Facility L/C Issuer, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Agent, a Multicurrency Facility Swing Line Lender and a Multicurrency Facility L/C Issuer, J.P. Morgan SE, as European Agent, JPMorgan Chase Bank, N.A., London Branch, as a Multicurrency Facility Swing Line Lender and a Multicurrency Facility L/C Issuer, each lender from time to time party thereto and the other parties party thereto.
