Deckers enters new $400 million five-year revolving credit facility

By William Gullotti

Buffalo, N.Y., Dec. 21 – Deckers Outdoor Corp. entered into a new $400 million unsecured revolving credit facility with Citibank, NA as administrative agent on Dec. 19, according to an 8-K filed with the Securities and Exchange Commission.

The credit facility will refinance and replace Deckers’ credit agreement dated Sept. 20, 2018 with JPMorgan Chase Bank, NA as administrative agent.

The new revolver will mature Dec. 19, 2027, which may be extended at the company’s request and subject to certain conditions including lender approval.

As with the facility it replaced, the new revolver contains a $25 million sublimit for the issuance of letters of credit, as well as a $175 million sublimit for borrowings in euros, pounds sterling, Canadian dollars and any other foreign currency approved by the administrative agent.

The company has the option to increase the revolver by an amount equal to the sum of $300 million and an additional amount that, at the time of the incurrence of such additional amount and assuming full utilization, will maintain a total net leverage ratio less than 3.5 to 1.0. No lenders committed to any such increase at signing.

Borrowings will bear interest at SOFR, Euribor, CDOR or Sonia plus a margin ranging from 100 basis points to 162.5 bps. There is also a facility fee that ranges from 12.5 bps to 20 bps on the daily unused amount of the revolver. In each case, the margin and fee are determined by the company’s total net leverage ratio.

Revolver borrowings may be prepaid at any time without premium or penalty, subject to certain exceptions.

Included in the agreement are sustainability-linked adjustments that, if implemented unaltered, will increase or decrease the margins and facility fees by 5 bps and 1 bps respectively based on ESG performance.

In addition to the refinancing transactions to replace and terminate the prior facility, borrowings may be used for working capital and general corporate purposes, including acquisitions and stock buybacks.

Citibank is also acting as a joint lead arranger and joint bookrunner along with Comerica Bank and HSBC Bank USA, NA. Comerica is also the syndication agent.

Deckers is a Goleta, Calif.-based footwear company.

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