| Item 1.01 | Entry into a Material Definitive Agreement. |
On September 1, 2023, Lowe’s Companies, Inc. (the “Company”) entered into an Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, U.S. Bank National Association and Wells Fargo Bank, National Association, as co-syndication agents and letter of credit issuers, Citibank, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Barclays Bank PLC, as co-documentation agents, and the other lenders party thereto, which Amended and Restated Credit Agreement amends and restates that certain Credit Agreement, dated as of March 23, 2020, by and among the Company, Bank of America, N.A., as administrative agent, swing line lender and a letter of credit issuer, U.S. Bank National Association, as syndication agent and a letter of credit issuer, Citibank, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A. and Wells Fargo Bank, National Association, as co-documentation agents, and the other lenders party thereto, to provide for a $2 billion unsecured revolving credit agreement (as amended and restated, the “2023 Credit Agreement”), maturing on September 1, 2028. Capitalized terms used but not defined herein have the meanings ascribed to such terms in the 2023 Credit Agreement.
Subject to obtaining commitments from the lenders and satisfying other conditions specified in the 2023 Credit Agreement, the Company may increase the aggregate availability under the 2023 Credit Agreement by an additional $500 million. The Company may request borrowings under the 2023 Credit Agreement that are denominated in any of the following currencies: U.S. Dollar, Euro, Sterling, Canadian Dollar and such other currencies as are approved by the administrative agent and the lenders in accordance with the 2023 Credit Agreement.
Borrowings under the 2023 Credit Agreement will bear interest, at the Company’s option, calculated according to a Base Rate or Term SOFR, as the case may be, plus an applicable margin. Depending on the Company’s credit ratings at the time of the borrowing, the applicable margin on a Base Rate Loan ranges from 0.000% to 0.100% and the applicable margin on a Term SOFR Loan ranges from 0.690% to 1.100%. At the Company’s current credit ratings, the applicable margin would be 0.000% for a Base Rate Loan and 0.910% for a Term SOFR Loan.
In addition, under the 2023 Credit Agreement, the Company must pay (i) a facility fee on the lenders’ aggregate commitments under the 2023 Credit Agreement ranging from 0.060% to 0.150% per annum, depending on the Company’s credit ratings, and (ii) a letter of credit fee for the outstanding letters of credit under the 2023 Credit Agreement ranging from 0.690% to 1.100% per annum, depending on the Company’s credit ratings. At the Company’s current credit ratings, the facility fee would be 0.090% of the aggregate commitments of the lenders (regardless of whether any borrowings are outstanding), and the letter of credit fee for an outstanding letter of credit would be computed at 0.910%. As of the date hereof, there are no outstanding borrowings under the 2023 Credit Agreement.
The 2023 Credit Agreement contains customary representations, warranties and covenants for transactions of this type, including a financial covenant requiring the Company to maintain at the end of each fiscal quarter a ratio of Consolidated Adjusted Funded Debt to Consolidated EBITDAR that does not exceed 4.00 to 1.00.
The 2023 Credit Agreement also contains customary events of default, including a cross-default provision and a change of control provision. In the event of a default, the administrative agent shall, at the request of, or may, with the consent of, the required lenders, declare the obligations under the 2023 Credit Agreement immediately due and payable and the commitments of the lenders may be terminated. For certain events of default relating to insolvency and receivership, the commitments of the lenders are automatically terminated and all outstanding obligations automatically become due and payable.
The foregoing description of the 2023 Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the 2023 Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
