Columbia Sportswear adds $400 million revolving B loan tranche

By Wendy Van Sickle

Columbus, Ohio, April 16 – Columbia Sportswear Co. amended and restated its credit agreement with Wells Fargo Bank, NA as administrative agent on Wednesday to provide for a $125 million revolving A loan through Aug. 1, 2023 and a $400 million revolving B loan through April 13, 2021, according to an 8-K filing with the Securities and Exchange Commission.

There is an uncommitted $100 million incremental facility that will be added to the revolving B loan if it is executed.

The credit agreement requires to the company to maintain a maximum funded debt ratio of 3.25 times, a maximum interest coverage ratio of 3 times and a minimum asset coverage ratio of 1 times.

Additionally, $50 million in expenses related to Covid-19 may be added back to net income for purposes of calculating EBITDA for covenant calculations.

Borrowings bear interest at Libor plus a margin ranging from 200 basis points to 275 bps with a 0.75% Libor floor for revolving A loans and a 1% Libor floor for revolving B loans.

There is a quarterly commitment fee ranging from 12 bps to 27 bps for the revolving A commitment and 37.5 bps to 45 bps for the revolving B commitment.

Wells Fargo Securities, LLC and BofA Securities, Inc. are the joint lead arrangers and joint bookrunners.

On April 15, the company borrowed $200 million under the credit agreement. The company had previously borrowed $125 million under the agreement.

Proceeds from the draw will be used for working capital and general corporate purposes.

The increased cash position resulting from the borrowings allows for greater financial flexibility in light of current uncertainty in the global markets resulting from the Covid-19 outbreak, the company said.

The outerwear and sportswear company is based in Portland, Ore.

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