NIKE, Inc. (NYSE:NKE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement
On August 16, 2019, NIKE, Inc. (the “Company”) entered into a Credit Agreement with Bank of America, N.A., as Administrative Agent, Citibank N.A., as Syndication Agent, Deutsche Bank Securities Inc., HSBC Bank USA, National Association and JPMorgan Chase Bank, N.A., as Co-Documentation Agents, and the other Banks named therein (the “Credit Agreement”). The Credit Agreement provides for up to $2.0 billion of borrowings in U.S. Dollars and other specified currencies to an unsecured revolving credit facility, including a $535 million sub-limit for swingline loans in Euros. The revolving credit facility also includes an uncommitted option to expand the size of the facility by up to $1.0 billion.
As of August 16, 2019, the Company is the only borrower under the revolving credit facility. However, the Credit Agreement allows for the Company to designate additional subsidiary borrowers from time to time. In the event that any subsidiary of the Company becomes a borrower, the Company has agreed to provide an unconditional guarantee in respect of any such subsidiary’s obligations in relation with the revolving credit facility.
The Credit Agreement contains covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional liens; engage in mergers, acquisitions and dispositions; engage in transactions with affiliates; and use proceeds of loans under the Credit Agreement. The Credit Agreement does not include any financial covenants.
The revolving credit facility provided in the Credit Agreement matures on August 16, 2024, with a one-year extension option prior to any anniversary of the closing date, provided that in no event shall it extend beyond August 16, 2026. The Credit Agreement replaces the $2.0 billion Prior Credit Agreement (as defined in Item 1.02 below) entered into on August 28, 2015.
The description of the Credit Agreement is qualified in its entirety by the copy thereof which is attached as Exhibit 10.1 and incorporated herein by reference.
Item 1.02 Termination of Material Definitive Agreement
On August 16, 2019, concurrently with the Company’s entry into the Credit Agreement described in Item 1.01 hereof, the Company terminated the Credit Agreement dated August 28, 2015, which provided for a $2.0 billion revolving credit facility, expandable to $2.75 billion, with the banks, financial institutions and other lenders signatory thereto (the “Prior Credit Agreement”). The Prior Credit Agreement contained covenants that limited or restricted the ability of the Company and its subsidiaries to take certain actions, as well as a financial covenant requiring the Company to maintain its debt capitalization ratio below 0.60 to 1.00, as of the end of each fiscal quarter. No amounts were outstanding under this facility as of August 16, 2019. The Prior Credit Agreement would have expired in August 2020.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement
The information contained in Item 1.01 of this current report on Form 8-K is by this reference incorporated in this Item 2.03.
Item 9.01 Financial Statements and Exhibits
The following exhibit is furnished with this Form 8-K:
NIKE, Inc. Exhibit
EX-10.1 2 nike-creditagreement2019.htm EXHIBIT 10.1 Exhibit Exhibit 10.1Execution VersionCREDIT AGREEMENTDated as of August 16,…
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About NIKE, Inc. (NYSE:NKE)
NIKE, Inc. is engaged in the design, development, marketing and selling of athletic footwear, apparel, equipment, accessories and services. The Company’s operating segments include North America, Western Europe, Central & Eastern Europe, Greater China, Japan and Emerging Markets. Its portfolio brands include the NIKE Brand, Jordan Brand, Hurley and Converse. As of May 31, 2016, the Company focused its NIKE brand product offerings in nine categories: Running, NIKE Basketball, the Jordan Brand, Football (Soccer), Men’s Training, Women’s Training, Action Sports, Sportswear (its sports-inspired lifestyle products) and Golf. Men’s Training includes its baseball and American football product offerings. It also markets products designed for kids, as well as for other athletic and recreational uses, such as cricket, lacrosse, tennis, volleyball, wrestling, walking and outdoor activities. The Company sells a range of performance equipment and accessories under the NIKE Brand name.