Ross Stores obtains new five-year revolver for up to $1.3 billion

By Rebecca Melvin

Concord, N.H., Feb. 18 – Ross Stores, Inc. entered into a new senior unsecured revolving credit agreement for up to $1.3 billion with Bank of America, NA as administrative agent on Friday, according to an 8-K filing with the Securities and Exchange Commission.

The facility replaces the company’s previous $800 million revolver entered into in July 2019.

The new facility matures in February 2027 and may be extended for up to two additional one-year periods, subject to customary conditions.

It contains a $300 million sublimit for issuance of standby letters of credit. It also contains an option allowing the company to increase the size of the facility by up to an additional $700 million with the agreement of committing lenders.

Loans bear interest at SOFR plus a ratings-based margin ranging from 67.5 basis points to 125 bps plus an adjustment of 10 bps to 25 bps for one to six months’ duration.

There is also a commitment fee of between 5 bps and 12.5 bps, based on ratings.

The facility includes customary conditions to credit extensions.

Other covenants include

• A consolidated adjusted debt to EBITDAR ratio of no less than 4.25 to 1.0 for the period ending April 30, 4 to 1 for the period ending July 30, 3.75 to 1 for the period ending Oct. 29, 2022 and 3.5 to 1 for the quarter ending Jan. 28. 2023;

• Restrictions on debt of the company and its subsidiaries, with limit on subsidiary debt of 20% of consolidated tangible net work of the company and subsidiaries;

• Limitations on the sale of assets; and

• Limitations on liens, with a general lien basket of $100 million.

The facility was undrawn at close.

Bank of America, NA, Wells Fargo Bank, NA, and JPMorgan Chase Bank, NA are syndication agents and letter of credit issuers under the new facility.

Based in Dublin, Calif., Ross owns a chain of discount department stores.

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