Item 1.01 Entry into a Material Definitive Agreement
As previously disclosed,
As further disclosed, we previously borrowed a total of
On
Under the Amendment, with respect to any borrowing other than the incremental revolving credit facility described in the Amendment, we are required to pay interest on any outstanding borrowing at LIBOR plus 1.50% and to pay a commitment fee of 0.25% per year for any unused portion of the credit facility through the end of the first quarter of our 2021 fiscal year. Subsequent to the first quarter of our 2021 fiscal year, we are required to pay interest on our outstanding borrowing at LIBOR plus 0.875% to 2.250% and to pay a commitment fee of 0.125% to 0.400% per year for any unused portion of the credit facility, in each case depending on our leverage ratio. With respect to the incremental revolving credit facility described in the Amendment, we are required to pay interest on any outstanding borrowing at LIBOR plus 2.250% and to pay a commitment fee of 0.500% per year for any unused portion of the incremental revolving credit facility. The Amendment also provides an Alternate Base Rate that may be substituted for LIBOR for any borrowings outstanding.
The Amendment also modifies the financial covenants contained in the Amended Credit Agreement. The Amended Credit Agreement, as amended by the Amendment, imposes the financial covenants of maintaining a fixed charge coverage ratio to be less than the following: (i) 1.00 to 1.00 for the second, third and fourth fiscal quarters for our 2020 fiscal year and the first fiscal quarter for our 2021 fiscal year; and (ii) 2.00 to 1.00 for each fiscal quarter thereafter. Additionally, the Amended Credit Agreement, as amended by the Amendment, imposes the financial covenants of maintaining a maximum leverage ratio to be less than the following: (a) 3.50 to 1:00 for the second fiscal quarter for our 2020 fiscal year; (b) 4.50 per 1.00 for the third and fourth fiscal quarters for our 2020 fiscal year; (c) 3.75 to 1.00 for the first fiscal quarter for our 2021 fiscal year; and (d) 3.00 to 1.00 for each fiscal quarter thereafter. The lenders' obligations to extend credit under the Amended Credit Agreement, as amended by the Amendment, will depend upon our compliance with these covenants.
Fees and expenses incurred in connection with the Amendment were paid from cash on hand.
The Obligations pursuant to the Amended Credit Agreement, as amended by the
Amendment, can be accelerated upon an Event of Default, as such terms are
defined in the Amended Credit Agreement. The description of the Amended Credit
Agreement, before execution of the Amendment, is qualified in its entirety by
the copy thereof which is attached as Exhibit 10.1 to our Current Report on Form
8-K dated
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
Concurrently with the execution of the Amendment and as a precautionary measure,
we provided notice to the lenders under the Amendment of our desire to exercise
our right to borrow on the senior 364-day incremental revolving credit facility
under the Amended Credit Agreement in the aggregate principal amount of up to
In light of the continued uncertainty in the global markets resulting from the COVID-19 outbreak, we increased our borrowing as a precautionary measure in order to bolster our cash position and further enhance financial flexibility. The proceeds from these borrowings are being held on our balance sheet and may in the future be used for general corporate purposes, including, without limitation, working capital, capital expenditures in the ordinary course of business, or other lawful corporate purposes, all in accordance with and subject to the terms and conditions of the Amended Credit Agreement.
Item 9.01 Financial Statements and Exhibits
(d) Exhibit First Amendment to Amended and Restated Credit Agreement, 10.1 dated as of May 11, 2020 by and among Texas Roadhouse, Inc., and the lenders named therein and JPMorgan Chase Bank, N.A., as Administrative Agent 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document). Forward-looking Statements
This Current Report on Form 8-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act of 1934, as amended. These statements include, but are not limited
to, statements related to the continued potential impact of the COVID-19
outbreak and other non-historical statements. Such statements are based upon the
current beliefs and expectations of the management of
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