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Item 1.01
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Entry into a Material Definitive Agreement.
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On June 25, 2021, The TJX Companies, Inc. (the “Company”) entered into a revolving credit agreement (the “2026 Revolving Credit Agreement”) with certain financial institutions, as lenders, U.S. Bank National Association, as administrative agent, HSBC Bank USA, National Association and Wells Fargo Bank, National Association, as co-syndication agents, and Bank of America, N.A., JPMorgan Chase Bank, N.A. and Deutsche Bank Securities, Inc., as co-documentation agents, providing for a $1.0 billion senior unsecured revolving credit facility maturing on June 25, 2026 (the “2026 Revolving Credit Facility”).
The 2026 Revolving Credit Facility includes a $250.0 million sublimit for the issuance of letters of credit and a $50.0 million sublimit for swing line loans. The Company may, with the agreement of the lenders providing any such incremental commitments, increase commitments under the 2026 Revolving Credit Facility in an aggregate amount not to exceed $500.0 million.
The 2026 Revolving Credit Facility replaces the Company’s revolving credit facility maturing in March 2022 and 364-day revolving credit facility maturing in August 2021. With the 2026 Revolving Credit Facility and the Company’s existing revolving credit facility maturing in 2024 (the “2024 Revolving Credit Facility”), the Company has maintained its borrowing capacity of $1.5 billion.
The Company will be required to pay an interest rate on borrowings under the 2026 Revolving Credit Facility ranging from a rate equal to LIBOR plus a margin of 57.5 – 100.0 basis points or a base rate and a quarterly facility fee payment of 5.0 – 12.5 basis points on the total commitments under the 2026 Revolving Credit Facility, in each case, based on the credit ratings of the Company’s long-term debt.
The terms of the 2026 Revolving Credit Facility require the Company to maintain a quarterly-tested leverage ratio of funded debt to earnings before interest, taxes, depreciation and amortization and rentals (“EBITDAR”) of 4.50 to 1.00 for the test period ending July 31, 2021 (with EBITDAR annualized for the three fiscal quarters then ended), 4.00 to 1.00 for the test period ending October 30, 2021 and 3.50 to 1.00 for the test period ending January 29, 2022 and for each test period ending thereafter.
The 2026 Revolving Credit Facility includes other affirmative and negative covenants and events of default substantially similar to those in the 2024 Revolving Credit Facility.
The foregoing description of the 2026 Revolving Credit Facility is a general description and is qualified in its entirety by reference to the full text of the 2026 Revolving Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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Item 1.02
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Termination of a Material Definitive Agreement.
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On June 25, 2021, in connection with the closing of the 2026 Revolving Credit Facility described in Item 1.01 above, the Company terminated its existing revolving credit agreement maturing in March 2022 with certain financial institutions, as lenders, and U.S. Bank National Association, as administrative agent, and its existing 364-day revolving credit agreement maturing in August 2021 with certain financial institutions, as lenders, and U.S. Bank National Association, as administrative agent. The Company incurred no early termination penalties in connection with the termination of these agreements.