FOSSIL GROUP,INC. (NASDAQ:FOSL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive
Agreement.
On March10, 2017, Fossil Group,Inc. (the Company), as borrower,
entered into a Second Amendment to Amended and Restated Credit
Agreement (the Second Amendment) with certain lenders party
thereto, Wells Fargo Bank, National Association, as
administrative agent, swingline lender and issuing lender, Bank
of America, N.A. and JPMorgan Chase Bank, N.A., as syndication
agents, HSBC Bank USA, National Association, Compass Bank and
Fifth Third Bank, as documentation agents, and Wells Fargo
Securities, LLC, Merrill Lynch, Pierce, Fenner Smith Incorporated
and JPMorgan Chase Bank, N.A., as joint lead arrangers and joint
bookrunners.
The Second Amendment reduces the revolving credit commitment
available under the Companys existing credit agreement to
$850,000,000. The Second Amendment also removes the incremental
term loan that was available under the credit agreement, extends
the maturity date of the credit agreement to March17, 2019 and
removes the Companys ability to make offers to the lenders to
extend the maturity date of the term loan or of the revolving
credit commitment.
The Second Amendment amends the amortization schedule for the
repayment of the term loan and requires the Company to make
monthly payments of the outstanding principal amount of the term
loan on the last business day of each month commencing on
April30, 2018. On and after April1, 2018, interest on the term
loan that is calculated by reference to the base rate will be due
and payable in arrears on the last business day of each calendar
month, and interest on the term loan that is calculated by
reference to the LIBOR rate will be due and payable on the last
day of the applicable interest period; provided, that if such
interest period extends for over one month, then interest will be
due and payable at the end of each one month interval during such
interest period. The Second Amendment also amends the mandatory
prepayment provisions under the credit agreement and provides
that to the extent there are excess proceeds remaining from the
issuance of debt by the Company following the repayment in full
of the term loan, the Company is required to repay the revolving
credit facility in the amount of such excess proceeds, with a
corresponding permanent reduction in the revolving credit
commitment in the amount of up to $50,000,000.
The Second Amendment amends the applicable margin used to
calculate the interest rate that is applicable to base rate loans
and LIBOR rate loans under the Companys credit agreement and
provides that the interest rate margin for base rate loans is
2.50% per annum and the interest rate margin for LIBOR rate loans
is 3.50% per annum; provided that, if the Companys term loan
under the credit agreement has not been repaid in full on or
prior to October1, 2017, then on such date, the applicable margin
will automatically increase to 2.75% per annum for base rate
loans and 3.75% per annum for LIBOR rate loans; provided further
that if the term loan has not been repaid in full on or prior to
March31, 2018, then on such date, the applicable margin will
automatically increase to 3.25% per annum for base rate loans and
4.25% per annum for LIBOR rate loans. The Second Amendment also
changes the commitment fee payable by the Company with respect to
the revolving credit facility to 0.50% per annum. The Company
will incur an additional fee of 0.25% times the outstanding
principal amount of the total credit exposure under the credit
agreement if the term loan has not been repaid in full on or
prior to March31, 2018. Furthermore, the Second Amendment changes
the consolidated total leverage ratio that the Company must
comply with as set forth below:
|
Period |
|
MaximumRatio |
|
Second Amendment Effective Date through and including |
3.25 to 1.00 |
|
|
July2, 2017 through and including September30, 2017 |
3.50 to 1.00 |
|
|
October1, 2017 through and including March31, 2018 |
3.25 to 1.00 |
|
|
April1, 2018 through and including September29, 2018 |
3.50 to 1.00 |
|
|
September30, 2018 and thereafter |
3.25 to 1.00 |
From time to time, certain of the lenders have provided, or may
in the future provide, various investment banking, commercial
banking, financial advisory, brokerage and other services to
the Company and its affiliates for which services they have
received, and may in the future receive, customary fees and
expense reimbursement. The lenders and their affiliates may,
from time to time, engage in transactions with and perform
services for the Company in the ordinary course of their
business for which they may receive customary fees and
reimbursement of expenses.
Item 2.03 Creation of a Direct
Financial Obligation or an Obligation under an Off-Balance
Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 of this report is
incorporated herein by reference.
About FOSSIL GROUP, INC. (NASDAQ:FOSL)
Fossil Group, Inc. is a design, marketing and distribution company that specializes in consumer fashion accessories. The Company’s segments are Americas, Europe and Asia. Each segment includes sales to wholesale and distributor customers, and sales through the Company-owned retail stores and e-commerce activities based on the location of the selling entity. The Americas segment includes sales to customers based in Canada, Latin America and the United States. The Europe segment includes sales to customers based in European countries, the Middle East and Africa. The Asia segment includes sales to customers based in Australia, China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, South Korea, Taiwan and Thailand. The Company’s principal offerings include a line of men’s and women’s fashion watches and jewelry, handbags, small leather goods, belts, sunglasses and soft accessories. Its brand includes FOSSIL, MICHELE, RELIC, SKAGEN, ZODIAC, ADIDAS, BURBERRY, DIESEL and DKNY. FOSSIL GROUP, INC. (NASDAQ:FOSL) Recent Trading Information
FOSSIL GROUP, INC. (NASDAQ:FOSL) closed its last trading session up +0.24 at 17.06 with 1,305,096 shares trading hands.
