Deckers Outdoor Corp. said that on August 10, it entered into a new credit agreement that increases the secured revolving credit facility under the original credit agreement from $200 million to $400 million. It also increases the sublimit for the issuance of letters of credit thereunder from $50 million to $75 million.
As under the original Credit Agreement, the Restated Credit Agreement
contains a $5 million sublimit for swingline loans. Subject to customary
conditions and the approval of any lender whose commitment would be
increased, the company has the option to increase the maximum principal
amount available under the Restated Credit Agreement by up to an
additional $100 million, resulting in a maximum available principal
amount of $500 million.
None of the lenders under the Restated
Agreement has committed at this time or is obligated to provide any such
increase in the commitments. Funds may be prepaid at any time and the
company has the right to permanently reduce or terminate the lenders'
commitments provided for under the Restated Credit Agreement.
the Company's option, revolving loans issued under the Restated Credit
Agreement will bear interest at either adjusted LIBOR or an alternate
base rate, in each case plus the applicable interest rate margin.
Revolving loans will initially bear interest at adjusted LIBOR plus
1.75% per annum, in the case of LIBOR borrowings, or at the alternate
base rate plus 0.75% per annum. After the compliance certificate is
received for the year ending December 31, 2012, the interest rate will
fluctuate between adjusted LIBOR plus 1.50% per annum and adjusted LIBOR
plus 2.25% per annum (or between the alternate base rate plus 0.50% per
annum and the alternate base rate plus 1.25% per annum), based upon the
Company's Total Adjusted Leverage Ratio (as defined in the Restated
Credit Agreement) at such time. In addition, the Company will initially
be required to pay fees of 0.25% per annum on the daily unused amount of
the revolving credit facility. After the compliance certificate is
received for the year ending December 31, 2012, the fee rate will
fluctuate between 0.20% and 0.35% per annum, based upon the Company's
Total Adjusted Leverage Ratio.
The Company's obligations under
the Restated Credit Agreement are guaranteed by the Company's existing
and future domestic subsidiaries (other than certain immaterial
subsidiaries and foreign subsidiaries), and are secured by a
first-priority security interest in substantially all of the assets of
the Company and the guarantors, including all or a portion of the equity
interests of certain of the Company's domestic subsidiaries and foreign
Funds provided under the Restated Credit Agreement
may be used for working capital and general corporate purposes,
including repurchases by the Company of its own stock. Unless the
lenders' commitments are terminated earlier in accordance with the
Restated Credit Agreement, the revolving loans and swingline loans
provided for under the Restated Credit Agreement are available until the
fifth anniversary of the effective date of the Restated Credit
The Restated Credit Agreement contains usual and
customary representations and warranties, and usual and customary
affirmative and negative covenants which include: limitations on liens,
additional indebtedness, investments, restricted payments and capital
expenditures; financial covenants (including maintenance of a minimum
consolidated asset coverage ratio and a maximum consolidated leverage
ratio); and other customary limitations. The Restated Credit Agreement
also contains usual and customary events of default which include:
non-payment of principal, interest, fees and other amounts; material
breach of a representation or warranty; non-performance of covenants and
obligations; default on other material debt; bankruptcy or insolvency;
material judgments; incurrence of certain material ERISA liabilities;
and a change of control of the Company.
In connection with the
Restated Credit Agreement, the Company paid certain commitment,
arrangement and other fees to JPMorgan and other parties to the Restated
Credit Agreement, and reimbursed certain of the parties' expenses.