Fossil enters $200 million five-year term loan, $275 million revolver

By Wendy Van Sickle

Columbus, Ohio, Oct. 1 – Fossil Group, Inc. entered into a credit agreement on Thursday, providing for a $275 million ABL revolving credit facility and a $200 million term loan, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement expires on Sept. 26, 2024.

The revolver includes sublimits of $160 million under a U.S. facility; $70 million under a European facility; $30 million under a Hong Kong facility; $10 million under a French facility; and $5 million under a Canadian facility.

There is also an up to $45 million subfacility for the issuance of letters of credit.

The French facility includes a $1 million subfacility for swingline loans, and the European facility includes a $7 million subfacility for swingline loans.

For both the revolver and the term loan, Wells Fargo Bank, NA, Citizens Bank, NA and JPMorgan Chase Bank, NA are the joint lead arrangers and joint bookrunners. JPMorgan is the administrative agent.

For the revolver, Wells Fargo and Citizens Bank are the syndication agents.

Revolver borrowings will bear interest at Libor plus an initial margin of 150 basis points, with the margin subject to range from 125 bps to 175 bps, depending on average excess availability.

There is an annualized 25 bps or 37.5 bps commitment fee, based on the average daily unused portion of the revolver.

The term loan will bear interest at Libor plus a margin of 650 bps.

The term loan amortizes in equal quarterly installments of 2.50% of the original principal amount until Sept. 30, 2021 and of 3.75% of the original principal amount until June 30, 2024, with the balance due at maturity.

As of closing of the new agreement, Fossil used some proceeds of the new revolver and term loan to repay the $276 million in outstanding principal amount of the loans, interest, fees, expenses and other obligations under its second amended and restated credit agreement, dated Jan. 29, 2018, which was terminated.

Future borrowings may be used for working capital.

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

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