Bath & Body Works secures amended credit facility

Bath & Body Works, Inc. (NYSE:BBWI) announced today the amendment and restatement of its senior secured asset-based revolving credit facility (ABL Facility). The revised ABL Facility terms extend the maturity date to five years from today, with specific provisions related to the company’s senior notes.

The ABL Facility permits Bath & Body Works to borrow and obtain letters of credit in U.S. or Canadian dollars up to the lesser of the borrowing base or the aggregate revolving credit commitments. The borrowing base is calculated as a percentage of eligible credit card receivables, accounts receivable, inventory, component inventory, and potentially real property, subject to certain conditions.

Interest rates for loans under the ABL Facility are tied to SOFR, CORRA, or alternative base rates, with margins varying based on average daily excess availability. There is also an unused commitment fee that ranges from 0.25% to 0.30%.

Bath & Body Works’ obligations under the ABL Facility are guaranteed by its domestic and Canadian wholly-owned material consolidated subsidiaries, known as ABL Guarantors. These obligations are secured by first priority liens on ABL Priority Collateral, which includes credit card receivables, accounts receivable, deposit accounts, inventory, and potentially real property. Additionally, there are second-priority liens on substantially all other assets, including intellectual property.

The ABL Facility imposes covenants that limit the company’s ability to incur certain indebtedness or grant liens on their assets. A financial maintenance covenant requires Bath & Body Works to maintain a 1:1 consolidated EBITDAR to consolidated fixed charges ratio, tested during specified periods.

This announcement is based on a press release statement filed with the Securities and Exchange Commission on May 22, 2025. The complete text of the agreements related to the ABL Facility can be found in the exhibits attached to the current report. With an EBITDA of $1.55 billion and a favorable Fair Value assessment from InvestingPro, Bath & Body Works demonstrates solid financial fundamentals. For comprehensive analysis and additional insights, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers, covering this and 1,400+ other top US stocks.

In other recent news, Bath & Body Works Inc. has seen several noteworthy developments. The company pre-announced first-quarter earnings per share (EPS) of $0.49, surpassing the consensus estimate of $0.45, attributed to a 3% increase in sales and improved gross margins. This strong performance led Citi analyst Paul Lejuez to raise the price target to $42, while maintaining a Buy rating. Additionally, UBS increased its price target to $36, maintaining a Neutral rating, and TD Cowen held its target at $48 with a Buy rating, following the announcement of Daniel Heaf as the new CEO.

Heaf’s appointment is seen as a strategic move to enhance growth and expand the company’s reach, especially in the fragrance and beauty segments. Analysts at BofA Securities reiterated their Buy rating with a $45 target, expressing optimism about Heaf’s potential to accelerate sales growth and redefine the company’s marketing strategy. The company also reaffirmed its fiscal year 2025 EPS guidance range of $3.25-$3.60, indicating confidence in its future performance despite increased tariffs. Piper Sandler analysts remain positive on beauty stocks, including Bath & Body Works, amid improving sector trends and strong demand in the fragrance category.

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