TXRH Texas Roadhouse Inc

As previously disclosed, Texas Roadhouse, Inc. and certain of its subsidiaries are parties to that certain Amended and Restated Credit Agreement dated August 7, 2017 (the “Amended Credit Agreement”). The Amended Credit Agreement is a revolving credit agreement under which we can borrow up to $200.0 million with the option to increase the credit facility by an additional $200.0 million (subject to certain limitations set forth in the Amended Credit Agreement). The material terms of the Amended Credit Agreement are described under “Note 5 – Long-term Debt” of the Notes to Consolidated Financial Statements for Texas Roadhouse, Inc. and its subsidiaries, which Note 5 is included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed with the Securities and Exchange Commission on February 28, 2020, and which description is incorporated herein by reference.

As further disclosed, we previously borrowed a total of $190.0 million under our Amended Credit Agreement in two separate transactions during March. Following the receipt of such transactions, we had a total of $198.2 million outstanding (including $8.2 million of outstanding letters of credit) under the Amended Credit Agreement. The current interest for such borrowings under the Amended Credit Agreement is a blended rate of approximately 2.27%.

On May 11, 2020 and as a precautionary measure, we entered into that certain Amendment No. 1 to Amended and Restated Credit Agreement (the “Amendment”) amending the terms and conditions of the Amended Credit Agreement with a syndicate of commercial lenders led by JPMorgan Chase Bank, N.A., PNC Bank, National Association, Wells Fargo Bank, National Association, U.S. Bank National Association, and Old National Bank. The Amendment provides for a senior 364-day incremental revolving credit facility under the Amended Credit Agreement in the aggregate principal amount of up to $82.5 million. These amounts are applied against the additional $200.0 million that was otherwise available under the Amended Credit Agreement so that we have the ability to increase the credit facility under the Amended Credit Agreement, as amended by the Amendment, by an additional $117.5 million following the execution of the Amendment (subject to certain limitations described in the Amended Credit Agreement). The maturity date for such incremental revolving credit facility is May 10, 2021; however, the maturity date for all other borrowings under the Amended Credit Agreement remains August 5, 2022.

Under the Amendment, with respect to any borrowing other than the incremental revolving credit facility described in the Amendment, we are required to pay interest on any outstanding borrowing at LIBOR plus 1.50% and to pay a commitment fee of 0.25% per year for any unused portion of the credit facility through the end of the first quarter of our 2021 fiscal year. Subsequent to the first quarter of our 2021 fiscal year, we are required to pay interest on our outstanding borrowing at LIBOR plus 0.875% to 2.250% and to pay a commitment fee of 0.125% to 0.400% per year for any unused portion of the credit facility, in each case depending on our leverage ratio. With respect to the incremental revolving credit facility described in the Amendment, we are required to pay interest on any outstanding borrowing at LIBOR plus 2.250% and to pay a commitment fee of 0.500% per year for any unused portion of the incremental revolving credit facility. The Amendment also provides an Alternate Base Rate that may be substituted for LIBOR for any borrowings outstanding.

The Amendment also modifies the financial covenants contained in the Amended Credit Agreement. The Amended Credit Agreement, as amended by the Amendment, imposes the financial covenants of maintaining a fixed charge coverage ratio to be less than the following: (i) 1.00 to 1.00 for the second, third and fourth fiscal quarters for our 2020 fiscal year and the first fiscal quarter for our 2021 fiscal year; and (ii) 2.00 to 1.00 for each fiscal quarter thereafter. Additionally, the Amended Credit Agreement, as amended by the Amendment, imposes the financial covenants of maintaining a maximum leverage ratio to be less than the following: (a) 3.50 to 1:00 for the second fiscal quarter for our 2020 fiscal year; (b) 4.50 per 1.00 for the third and fourth fiscal quarters for our 2020 fiscal year; (c) 3.75 to 1.00 for the first fiscal quarter for our 2021 fiscal year; and (d) 3.00 to 1.00 for each fiscal quarter thereafter. The lenders’ obligations to extend credit under the Amended Credit Agreement, as amended by the Amendment, will depend upon our compliance with these covenants.

Fees and expenses incurred in connection with the Amendment were paid from cash on hand.

The Obligations pursuant to the Amended Credit Agreement, as amended by the Amendment, can be accelerated upon an Event of Default, as such terms are defined in the Amended Credit Agreement. The description of the Amended Credit Agreement, before execution of the Amendment, is qualified in its entirety by the copy thereof which is attached as Exhibit 10.1 to our Current Report on Form 8-K dated August 7, 2017 and incorporated herein by reference. The description of the Amendment is qualified in its entirety by the copy thereof which is attached hereto as Exhibit 10.1 and incorporated herein by reference.