As previously announced, on October 24, 2019, Tapestry, Inc. (the “Company”) entered into a definitive credit agreement (the “Credit Agreement”) for a $900 million unsecured revolving credit facility with Bank of America, N.A., as administrative agent, the other agents and a consortium of banks and financial institutions. A description of the credit agreement can be found in point 1.01 of Tapestry`s current report on Form 8-K, which was filed on 24 October 2019 and is inserted by reference to point 2.03. As of December 28, 2019, the company had no credit or credit outstanding under the credit agreement. On March 25, 2020, the Company decided to use a total of $700 million under the credit agreement, which will be financed on March 30, 2020 under the terms of the credit agreement. These loans under the Credit Agreement are remunerated at an annual rate equal to an interest rate based on the interest rates of deposits on the interbank market for the U.S. dollar or the applicable currency in which the loans are granted (the “Adjusted LIBO Rate”), plus an applicable margin based on the ratio of (a) consolidated debt to consolidated EBITDAR (“leverage ratio”). The applicable margin for bonds is between 0.805% and 1.225% per annum for bonds with adjusted LIBO rates. Based on the Company`s current leverage ratio, the current interest margin is 1.015% for adjusted LIBO bonds. After being charged, the company had a residual credit capacity of $200 million under the credit agreement. On May 19, 2020 (effective date), Tapestry, Inc. (the “Company”) the amendment number.
1 (the “Amendment”) to the Revolving Credit Facility (the “Revolving Credit Facility”) of October 24, 2019, in the form of borrower, Bank of America, N.A., administrative agent (“Administrative Agent”) and a consortium of banks and financial institutions (together the “Lenders”). In accordance with the terms of the amendment, the entity shall maintain available liquidity of $700 million for the period from the effective date to October 2, 2021 (available liquidity being defined as the sum of unlimited means of payment and cash equivalents and liabilities available under credit facilities, including the revolving credit facility). After the period from the effective date to the provision of the Certificate of Compliance for 3 The quarter of operation ending July 1, 2021 (the “Covenant Relief Period”) must be a maximum net debt ratio of 4.0 to 1.0 per quarter. In addition, the amendment provides that, during the Covenant Relief Period, if two of the company`s three ratings are not investment grades, the revolving credit facility is guaranteed by the company`s main domestic subsidiaries and is subject to pledge rights over receivables, inventory and intellectual property, subject to customary exceptions. The amendment also contains negative covenants that limit the ability of the company and its subsidiaries to incur, among other things, certain debts, make certain pledges, dispose of assets, make investments, loans or advances, and make share buybacks during the Relief Covenant Period. An increased interest rate will apply during the covenant relief period if the company`s gross debt ratio exceeds 4.0 to 1.0. . . .