2
Item 1.01 Entry into a Material Definitive Agreement
On May
19, 2022,
The Cato
Corporation (the
“Company”), entered
into a
credit agreement
(the “Credit
Agreement”) among the
Company, the
guarantors party thereto,
the banks party
thereto and
Wells
Fargo
Bank,
National
Association,
as
Agent.
The
Credit
Agreement
provides
for
a
five-year
$35.0
million
unsecured revolving credit facility (the “Revolving Credit Facility”). The agreement also provides that the
Company
may
seek
increases
to
the
Revolving
Credit
Facility
in
an
aggregate
amount
so
that
the
Revolving Credit Facility does not exceed $75.0 million.
Borrowings
under
the
Revolving
Credit
Facility
will
bear
interest
at
an
annual
rate
of
the
Secured
Overnight
Funding
Rate
(SOFR)
plus
1.0%
or
(b)
an
alternate
base
rate
(as
described
in
the
Credit
Agreement).
In addition,
a commitment
fee accrues
with respect
to the
unused amount
of the
Revolving
Credit Facility at an annual rate of 0.10%.
The
Revolving
Credit
Facility
is
guaranteed
by
each
of
the
Company’s
wholly
owned
domestic
subsidiaries, other than
any subsidiary that
owns part of
the Company’s
York,
South Caroling real
estate
holdings,
and
its
bank
and
captive
insurance
subsidiaries
Cedar
Hill
National
Bank
and
Providence
Insurance, respectively.
The Credit Agreement provides that the Company must maintain compliance
with a minimum
consolidated tangible net worth and a minimum coverage ratio of EBITDAR
to fixed charges, as
determined in accordance with the Credit Agreement.
The Credit Agreement also contains affirmative, negative and financial covenants
customary for
financings of this type, including, among other things, limitations on
certain other indebtedness, loans and
investments, liens, mergers, asset sales,
transactions with affiliates and capital expenditures,
as well as
customary events of default.
The foregoing description of
the Credit Agreement does
not purport to be
complete and is qualified in its
entirety by
reference to
the full
text of
the Credit
Agreement. A
copy of
this Credit
Agreement is
incorporated
as exhibit
10.1
hereto.
Item 1.02 Termination
of a Material Definitive Agreement
The disclosure
provided in
Item 1.01
of this
Current Report
on Form
8-K is
hereby incorporated
by reference
into
this Item
1.02. On
May 19,
2022, in
connection with
the closing
of the
Revolving Credit
Facility described
in Item
1.01, the Company
terminated its credit
agreement, dated as
of August 22,
2003, between the
Company and Branch
Banking and Trust Company,
as administrative agent, issuing bank, and a bank.
Item 2.02. Results of Operations and Financial Condition.
On May 19, 2022, The Cato Corporation issued a press release
regarding its financial results for the first
quarter ending April 30, 2022. A copy of this press release is hereby
incorporated as Exhibit 99.1 hereto.
Item
2.03
Creation
of
a
Direct
Financial
Obligation
or
an
Obligation
under
an
Off-Balance
Sheet
Arrangement of a Registrant
The disclosure
provided in
Item 1.01
of this
Current Report
on Form
8-K is
hereby incorporated
by reference
into
this Item 2.03
