Tapestry signs $1.25 billion revolver, $500 million delayed-draw loan

By Wendy Van Sickle

Columbus, Ohio, May 12 – Tapestry, Inc. entered Thursday into a definitive agreement to refinance and replace its existing revolving credit facility with a new $1.25 billion revolver and a $500 million delayed-draw term loan facility, both due May 11, 2027, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA is the administrative agent. BofA Securities, Inc., JPMorgan Chase Bank, NA and HSBC Bank USA, NA are the lead arrangers and bookrunners. JPMorgan and HSBC are the co-syndication agents. Citibank, NA, TD Bank, NA, U.S. Bank NA and Wells Fargo Bank, NA are the co-documentation agents.

The revolver includes sub-facilities for up to $125 million of letters of credit and up to $50 million of swingline loans.

Proceeds may be used to finance working capital needs, capital expenditures, permitted investments, share purchases, dividends and other general corporate purposes of the company and its subsidiaries.

Revolving commitments may be increased by up to $500 million, subject to some terms and conditions.

Revolving loans may be made at the borrowers’ election in dollars, euros, pounds sterling or yen.

The delayed-draw loan will amortize at a rate of 5% a year, with payments due quarterly. The new delayed-draw term loan may be borrowed in dollars only and will be used to satisfy the company’s remaining obligations under its 3% senior notes due 2022 and for general corporate purposes. The delayed-draw loans are available to be drawn until July 8.

Interest will be term SOFR plus a margin based on leverage ratio. For the revolver, the margin will range from 80.5 basis points to 122.5 bps. For the delayed-draw loan it ranges from 87.5 bps to 137.5 bps. The revolver has a commitment fee ranging from 7 bps to 15 bps. The delayed-draw loan has a ticking fee on unused amounts of 9 bps.

Revolving loans may be prepaid and commitments may be terminated or reduced without premium or penalty, other than customary breakage costs.

The company and its subsidiaries must comply on a quarterly basis with a maximum leverage ratio of 4x.

Tapestry is a New York-based luxury fashion company.

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