Item 1.01. Entry into Material Definitive Agreements.
OnSeptember 22, 2021 ,Big Lots, Inc. ("BLI"), its wholly-owned subsidiaryBig Lots Stores, Inc. ("BLSI"), and certain of its other direct and indirect wholly-owned subsidiaries (together with BLI and BLSI, "we," "us" or "our") entered into a new$600 million five-year unsecured credit facility (the "2021 Credit Agreement"). The 2021 Credit Agreement was entered into by and among BLI and BLSI, as borrowers; certain subsidiaries named therein, as guarantors; the Banks named therein;PNC Bank, National Association , as administrative agent for the Banks;PNC Capital Markets LLC , as a Joint Lead Arranger and Joint Bookrunner;Wells Fargo Bank, National Association ,U.S. Bank National Association andTruist Bank , as Co-Syndication Agents, Joint Lead Arrangers and Joint Bookrunners; andThe Huntington National Bank ,Bank of America N.A .,Fifth Third Bank , National Association, andMUFG Bank, Ltd. as Co-Documentation Agents. The 2021 Credit Agreement replaces the$700 million five-year unsecured credit facility we entered into onAugust 31, 2018 , as amended ("2018 Credit Agreement"). The 2018 Credit Agreement was scheduled to expire onAugust 31, 2023 , but was terminated concurrent with our entry into the 2021 Credit Agreement. We did not incur any material early termination penalties in connection with the termination of the 2018 Credit Agreement. The 2021 Credit Agreement expires on September [22], 2026. The proceeds of the 2021 Credit Agreement are available for general corporate purposes, working capital and to repay certain of our indebtedness, including amounts due under the 2018 Credit Agreement. The 2021 Credit Agreement includes a$50 million swing loan sublimit, a$75 million letter of credit sublimit, a$75 million sublimit for loans to foreign borrowers, and a$200 million optional currency submit. Optional currencies include Canadian Dollars, Euros and any other currencies approved by PNC and the Banks. Under the 2021 Credit Agreement, BLI and BLSI have the option to (a) establish one or more incremental term loans and/or increases in the Revolving Credit Commitments (as defined in the 2021 Credit Agreement) in an aggregate amount of up to$300 million , subject to agreement by the Banks to increase their commitments, and (b) extend the maturity date of the 2021 Credit Agreement by one year no more than two times during the term of the facility, subject to agreement by each Bank to extend the maturity date in respect of its loans. The interest rates, pricing and fees under the 2021 Credit Agreement fluctuate based on BLI's debt rating or its leverage ratio, whichever results in more favorable pricing to us. The 2021 Credit Agreement allows us to select our interest rate for each borrowing from multiple interest rate options. The interest rate options are generally derived from the prime rate or LIBOR. The 2021 Credit Agreement updated the LIBOR fallback language to implement "hardwired" fallback provisions, pursuant to which the interest rate on the loans will transition to an alternative rate upon the occurrence of certain LIBOR cessation events. Loans made under the 2021 Credit Agreement may be prepaid. The 2021 Credit Agreement contains financial and other covenants, including, but not limited to, limitations on indebtedness, liens and investments, as well as the maintenance of two financial ratios - a leverage ratio and a fixed charge coverage ratio. The 2021 Credit Agreement increases the maximum leverage ratio for each fiscal quarter by 0.25 and does not change the fixed charge coverage ratio requirement from the 2018 Credit Agreement. A violation of these covenants could result in a default under the 2021 Credit Agreement which would permit the lenders to restrict our ability to further access the 2021 Credit Agreement for loans and letters of credit and require the immediate repayment of any outstanding loans under the 2021 Credit Agreement. As ofSeptember 22, 2021 , the Company had utilized$7 million in letters of credit and had no borrowings outstanding under the 2018 credit facility. Certain of the lenders who are a party to the 2021 Credit Agreement provide us with commercial banking, trustee and custodial services. Simultaneous with our entry into the 2021 Credit Agreement,AVDC, Inc. ("AVDC"), a wholly owned subsidiary of BLI, BLI and certain subsidiaries of BLI named therein, as guarantors (the "Operative Agreements Guarantors"),Wachovia Service Corporation , as lessor ("Lessor"),Wells Fargo Bank, N.A. , as agent ("Agent"), and the lease participant parties thereto (the "Lease Participants") entered into the Third Amendment to Certain Operative Agreements (the "2021 Operative Agreements Amendment"). The 2021 Operative Agreements Amendment makes conforming changes to the Participation Agreement datedNovember 30, 2017 among AVDC, BLI, the other Operative Agreement Guarantors, Lessor, Agent and the Lease Participants, as previously amended, to align with the changes made to the 2018 Credit Agreement in the 2021 Credit Agreement. A copy of the 2021 Credit Agreement and the 2021 Operative Agreements Amendment are filed herewith as Exhibit 10.1 and Exhibit 10.2, respectively. The foregoing descriptions of the 2021 Credit Agreement and the 2021 Operative Agreements Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the 2021 Credit Agreement and the 2021 Operative Agreements Amendment, as applicable, which are incorporated herein by reference.
Press Release
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits Exhibit No. Description 10.1 Credit Agreement, dated September
22, 2021, by and among Big Lots,
Inc. andBig Lots Stores, Inc. , as
borrowers, the Guarantors named
therein, and the Banks named
therein.
10.2 Third Amendment to Operative
Documents, dated
and amongAVDC, Inc. , as lessee,
the guarantors thereto, Wachovia
Service Corporation, as lessor,
the lease participant parties thereto. 99.1Big Lots, Inc. Press Release datedSeptember 22, 2021 . 104 Cover Page Interactive Data File (formatted as Inline XBRL).
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