Best Buy Co., Inc. (BBY, Financial) has announced the successful entry into a new $1.25 billion five-year senior unsecured revolving credit facility agreement. This new agreement, effective April 18, 2025, involves U.S. Bank National Association as the administrative agent and Bank of America, N.A. as the syndication agent, along with a syndicate of banks collectively referred to as the "Lenders".
This new credit facility replaces the previous $1.25 billion senior unsecured revolving credit facility that was established on April 12, 2023, and was scheduled to expire in April 2028. The previous facility was terminated on April 18, 2025. The new agreement allows for borrowings up to $1.25 billion and is set to terminate in April 2030. As of now, no amounts have been drawn under this new facility.
The terms of the new facility are substantially similar to the previous one, with a variable interest rate determined at Best Buy's discretion. The rate options include a combination of U.S. Bank’s prime rate, federal funds effective rate, overnight bank funding rate, and Adjusted Term SOFR, plus a variable margin rate. Additionally, a facility fee is assessed based on Best Buy's current senior unsecured debt rating.
The agreement includes customary covenants that restrict Best Buy and certain subsidiaries from incurring liens, making significant corporate changes, disposing of material assets, and engaging in mergers or certain transactions with affiliates. It also requires maintaining a maximum quarterly cash flow leverage ratio.
Some of the Lenders involved in this agreement have existing business relationships with Best Buy, providing various financial and banking-related services. This new credit facility is expected to support Best Buy's financial flexibility and operational needs.
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