Fossil Group amends credit agreement, including pricing increase

By Wendy Van Sickle

Columbus, Ohio, Aug. 9 – Fossil Group, Inc. entered into a first amendment to its amended and restated credit agreement on Monday, increasing pricing and adding two levels to the pricing grid used to determine the applicable margin, according to an 8-K filing with the Securities and Exchange Commission.

The amendment increases the margin by 25 basis points at each level of the pricing grid.

Additionally, the amendment provides for the net cash proceeds from certain debt issuances by Fossil in excess of $25 million to be applied, first, to prepay the term loans under the credit facility and, for the excess, if any, to prepay the revolving credit loans with a corresponding reduction in the revolving credit.

The amendment also modifies the negative covenant on restricted payments to prohibit Fossil’s ability to make open-market repurchases of its common stock.

Further, the amendment raises the consolidated total leverage ratio that the company must comply with for fiscal quarters ending on or after June 30 to 3.25 times from 2.50 times.

Wells Fargo Securities, LLC, Bank of America Merrill Lynch and JPMorgan Chase Bank, NA are the joint lead arrangers and joint bookrunners of the amended credit agreement; Bank of America, NA and JPMorgan Chase Bank, NA the syndication agents; and HSBC Bank USA, NA, Compass Bank and Fifth Third Bank the documentation agents. Wells Fargo Bank, NA is the administrative agent.

In connection with the amendment, the company and some of its material domestic subsidiaries entered into a collateral agreement granting liens on all or substantially all of their assets to secure the company’s obligations under the credit agreement.

Fossil is a fashion accessories designer and marketer based in Richardson, Texas.

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