Item 1.01. Entry into a Material Definitive Agreement.
Indenture Governing 4.125% Senior Notes Due 2029
On November 18, 2021 (the "Closing Date"), Kontoor Brands, Inc. (the "Company")
entered into an indenture (the "Indenture"), by and among the Company, the
certain subsidiaries of the Company named as guarantors therein (the
"Guarantors") and U.S. Bank National Association, as trustee, pursuant to which
the Company issued and sold $400.0 million aggregate principal amount of its
4.125% Senior Notes due 2029 (the "Notes") through a private placement to
qualified institutional buyers pursuant to Rule 144A under the Securities Act of
1933, as amended (the "Securities Act"), and outside the United States to
non-U.S. persons pursuant to Regulation S under the Securities Act. The Notes
were initially sold pursuant to a purchase agreement, dated November 10, 2021,
among the Company, the Guarantors and J.P. Morgan Securities LLC, as
representative of the initial purchasers named therein.
The Notes mature on November 15, 2029 and bear interest at a rate of 4.125% per
annum. Interest on the Notes is payable to the holders thereof semi-annually in
arrears on May 15 and November 15 of each year, beginning on May 15, 2022.
The Notes are guaranteed on a senior unsecured basis by the Company's existing
and future domestic subsidiaries (other than certain excluded subsidiaries) that
guarantee the New Credit Facilities (as defined below) and/or certain other
indebtedness. The Notes rank pari passu in right of payment with all existing
and future senior indebtedness of the Company and the Guarantors, and are
effectively subordinated to all of the Company's and the Guarantors' existing
and future indebtedness secured by a lien, to the extent of the value of the
collateral securing such indebtedness.
The Company may redeem all or a portion of the Notes beginning on November 15,
2024 at the redemption prices set forth in the Indenture. Prior to November 15,
2024, the Company may redeem all or a portion of the Notes at a redemption price
equal to 100% of the principal amount of the Notes plus the "make-whole" premium
described in the Indenture. The Company may also redeem up to 40% of the
aggregate principal amount of the Notes at any time prior to November 15, 2024
using the net proceeds from certain equity offerings at a redemption price equal
to 104.125% of the principal amount of the Notes.
The Indenture contains customary negative covenants for financings of this type
that, among other things, limit the Company's ability and the ability of its
restricted subsidiaries to incur additional indebtedness or issue certain
preferred shares, pay dividends, redeem stock or make other distributions, make
certain investments, sell or transfer certain assets, create liens, consolidate,
merge, sell or otherwise dispose of all or substantially all of the Company's
assets, enter into certain transactions with affiliates, and designate
subsidiaries as unrestricted subsidiaries.
The net proceeds from the offering of the Notes, together with an estimated $8.0
million of cash on hand, were used to fund the repayment of $265.0 million
aggregate principal amount outstanding under the Company's existing Term Loan A
and $133.0 million aggregate principal amount outstanding under the Company's
existing Term Loan B.
Amended and Restated Credit Agreement
Also on the Closing Date, concurrently with the issuance of the Notes, the
Company and its wholly owned Swiss-organized subsidiary Kontoor International
Sagl ("Kontoor International") entered into an Amended and Restated Credit
Agreement (the "Amended and Restated Credit Agreement") with JPMorgan Chase
Bank, N.A., as administrative agent and collateral agent, the co-syndication
agents party thereto, the co-documentation agents party thereto, the several
lenders from time to time parties thereto, and the joint lead arrangers and
joint bookrunners party thereto. The Amended and Restated Credit Agreement
provides for (i) a $400.0 million term loan A facility (the "New Term Loan
Facility") and (ii) a $500.0 million revolving credit facility (the "New
Revolving Credit Facility" and, together with the New Term Loan Facility, the
"New Credit Facilities"). No draws were made under the New Revolving Credit
Facility at closing.
Borrowings under the Amended and Restated Credit Agreement bear interest at a
rate per annum equal to the Applicable Margin (as defined therein) plus, at the
Company's option, either (a) a base rate determined by reference to the highest
of (1) the Federal Funds Rate plus 0.50%, (2) the rate of interest last quoted
by The Wall Street Journal as the "Prime Rate" in the U.S. and (3) the
Eurocurrency rate that would be calculated as of such day in respect of a
proposed Eurocurrency rate loan with a one-month interest period plus 1.00%, or
(b) an interest rate benchmark elected by the applicable borrower based on the
currency being borrowed and in accordance with the terms of the Amended and
Restated Credit Agreement.
Letters of credit are available for issuance under the Amended and Restated
Credit Agreement on terms and conditions customary for financings of this type,
which issuances will reduce availability under the New Revolving Credit
Facility.
The term loans under the New Term Loan Facility will be repaid (i) in 19
consecutive quarterly installments equal to each lender's pro rata share and
using a multiplier as determined by the terms of the Amended and Restated Credit
Agreement (as such payments may be adjusted from time to time as a result of the
application of prepayments, extensions and increases in accordance with the
Amended and Restated Credit Agreement), with the balance of the New Term Loan
Facility being payable on November 18, 2026. The New Revolving Credit Facility
will also mature on November 18, 2026.
The New Credit Facilities contain customary mandatory prepayments, including
with respect to asset sale proceeds and proceeds from certain incurrences of
indebtedness. The New Credit Facilities do not contain a mandatory prepayment
with

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respect to excess cash flow. The Company may voluntarily repay outstanding loans
under the New Credit Facilities at any time without premium or penalty, other
than customary breakage costs with respect to LIBOR, EURIBOR, TIBOR, CDOR or RFR
loans (each as further described in the Amended and Restated Credit Agreement).
The Amended and Restated Credit Agreement contains certain affirmative and
negative covenants customary for financings of this type that, among other
things, limit the ability of the Company and its subsidiaries to incur
additional indebtedness or liens, to dispose of assets, to make certain
fundamental changes, to designate subsidiaries as unrestricted, to make certain
investments, to prepay certain indebtedness and to pay dividends, or to make
other distributions or redemptions/repurchases, in respect of the Company and
its subsidiaries' equity interests. In addition, the Amended and Restated Credit
Agreement contains financial covenants which require compliance with (i) a total
leverage ratio not to exceed 4.50 to 1.00 as of the last day of any test period,
with an allowance for up to two elections to increase the limit to 5.00 to 1.00
in connection with certain material acquisitions, and (ii) a consolidated
interest coverage ratio as of the last day of any test period to be no less than
3.00 to 1.00. The Amended and Restated Credit Agreement also contains events of
default customary for financings of this type, including certain customary
change of control events.
The borrowers under the Amended and Restated Credit Agreement comprise the
Company and Kontoor International. Additional subsidiary borrowers may be added
from time to time on the terms and conditions set forth therein. The obligations
of the borrowers are guaranteed by certain direct and indirect domestic
subsidiaries of the Company, subject to certain exceptions. All obligations
under the New Credit Facilities and the guarantees of those obligations are
secured by a perfected first priority security interest in substantially all of
such guarantors' tangible and intangible assets, subject to certain thresholds
and limitations set forth in the Amended and Restated Credit Agreement.
Copies of the Indenture, the Form of Notes and the Amended and Restated Credit
Agreement are attached hereto as Exhibits 4.1, 4.2 and 10.1, respectively, and
are incorporated herein by reference. The foregoing description of the
Indenture, the Notes and the Amended and Restated Credit Agreement does not
purport to be complete and is qualified in its entirety by reference to the
complete text of the Indenture, the Notes and the Amended and Restated Credit
Agreement.
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 above is incorporated by reference into
this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On the Closing Date, the Company issued a press release announcing the
successful completion of its offering of the Notes. A copy of the press release
is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in this Form 8-K under Item 7.01, including Exhibit 99.1 hereto,
is being furnished pursuant Item 7.01 of Form 8-K and shall not be deemed
"filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing made by
the Company under the Securities Act, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.        Description
                   Indenture, dated as of November 18, 2021 by and among Kontoor Brands, Inc., the
  4.1              guarantors party thereto and U.S. Bank National Association, as trustee,
                   governing the 4.125% Senior Notes due 2029.
  4.2              Form of 4.125% senior Notes due 2029 (incorporated by reference to Exhibit A to
                   Exhibit 4.1 filed herewith).
                   Amended and Restated Credit Agreement, dated as of November 18, 2021, by and
                   among Kontoor Brands, Inc., the co-borrowers and guarantors party thereto,
  10.1             JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, the
                   co-syndication agents party thereto, the co-documentation agents party thereto,
                   the several lenders from time to time parties thereto, and the joint lead
                   arrangers and joint bookrunners party thereto.
  99.1             Press release issued by Kontoor Brands, Inc., dated November 18, 2021.
                   Cover Page Interactive Data File - The cover page interactive data file does not
104                appear in the Interactive Data File because its XBRL tags are embedded within the
                   Inline XBRL document.

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