lululemon extends $400 million revolver maturity to 2026

By Marisa Wong

Los Angeles, Dec. 17 – lululemon athletica inc. entered into an amended and restated credit agreement on Dec. 14 to extend its existing credit facility, according to an 8-K filing with the Securities and Exchange Commission.

The credit facility, which provides for $400 million of commitments under an unsecured five-year revolver, matures on Dec. 14, 2026, subject to extension in some cases.

Borrowings bear interest at SOFR plus an applicable margin based on the ratio of indebtedness to EBITDAR that ranges from 100 basis points to 137.5 bps.

Additionally, a commitment fee of between 10 bps and 20 bps, based on the same pricing grid, is payable on the average daily unused amounts under the credit facility.

Pricing is subject to adjustment based on some sustainability key performance indicators (KPIs). The two KPIs are based on greenhouse gas emissions intensity reduction and gender pay equity, and the company’s performance against some targets measured on an annual basis could result in positive or negative sustainability rate adjustments of 2.5 bps to drawn pricing and positive or negative sustainability fee adjustments of 0.5 bps to undrawn pricing.

The credit agreement contains financial covenants including maintaining an operating lease adjusted leverage ratio of not greater than 3.25 to 1.00 and a ratio of consolidated EBITDAR to consolidated interest charges (plus rent) of not less than 2.00 to 1.00.

All borrowings under the credit facility are guaranteed by lululemon athletica inc. and lululemon usa inc., and borrowings made by lululemon athletica canada inc. and Lulu Canadian Holding, Inc. are cross-guaranteed by the other party.

Bank of America, NA is administrative agent, swingline lender and letter-of-credit issuer, with HSBC Bank Canada as syndication agent and letter-of-credit issuer. BofA Securities, Inc. is sustainability coordinator.

The athletic apparel manufacturer is based in Vancouver, B.C.

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