On October 18, 2023, Target (TGT) entered into a 364-Day Credit Agreement (the “Credit Agreement”) with the banks listed therein (the “Banks”), the co-documentation agents listed therein, Bank of America, N.A., as administrative agent (the “Agent”), Citibank, N.A., as syndication agent, and BofA Securities, Inc., Citibank, N.A., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, and U.S. Bank National Association, as joint lead arrangers and joint bookrunners. The Credit Agreement will expire on October 16, 2024 (the “Termination Date”). In connection with the entry into the Credit Agreement, Target terminated its prior 364-Day Credit Agreement, dated as of October 25, 2022, which was scheduled to expire on October 24, 2023.
Under the Credit Agreement, the Banks committed to provide loans in an aggregate principal amount of up to $1.0 billion, which may be increased from time to time by up to $500 million. Borrowings under the Credit Agreement bear interest at a base rate or term SOFR rate (which includes a SOFR adjustment), in each case plus an applicable margin, which varies based on the type of loan and Target’s debt ratings. Target may, at its option, elect to convert all loans outstanding on the Termination Date into term loans due and payable on the first anniversary of the Termination Date.
The terms of the Credit Agreement include representations and warranties, affirmative and negative covenants, including a financial covenant regarding the leverage ratio of Target and its consolidated subsidiaries, and events of default that are customary for credit facilities of this nature. Upon the occurrence, and during the continuance, of an event of default, the Agent may terminate the commitments of the Banks under the Credit Agreement and declare any outstanding loans under the Credit Agreement immediately due and payable.
The foregoing description of the Credit Agreement is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which will be filed as an exhibit to Target’s Quarterly Report on Form 10-Q for the quarter ending October 28, 2023.