Lowe’s Companies secures new credit agreements to support $8.8 billion acquisition

Lowe’s Companies Inc. (NYSE:LOW) entered into several new credit agreements on Tuesday to help finance its planned $8.8 billion acquisition of ASP Flag Parent Holdings, Inc., according to a statement filed with the Securities and Exchange Commission.

The company executed a $2 billion unsecured revolving credit facility, replacing an existing facility of the same size, and a $2 billion unsecured term loan facility. Both agreements were signed with a group of lenders led by Bank of America, N.A. The revolving credit facility matures in five years, while the term loan matures in three years. These facilities are intended to fund a portion of the purchase price and related costs, and to support Lowe’s existing commercial paper program.

The new agreements replace $4 billion in commitments from a previously disclosed 364-day bridge loan facility. After these changes, $5 billion in bridge facility commitments remain. Lowe’s stated it expects to replace the remaining bridge commitments through capital markets transactions, depending on market conditions, before closing the acquisition.

Lowe’s also entered into a new $1 billion unsecured revolving credit facility with a 364-day maturity for general corporate purposes, and amended an existing credit agreement to remove the term SOFR credit spread adjustment.

The lenders involved in these agreements, and their affiliates, have provided and may continue to provide various banking and advisory services to Lowe’s and its affiliates for customary fees.

All information is based on a press release statement included in Lowe’s SEC filing.

In other recent news, Lowe’s has been the focus of multiple analyst updates following its second-quarter results. KeyBanc raised its price target for Lowe’s to $300 from $266, maintaining an Overweight rating. This decision was influenced by Lowe’s reported comparable sales growth of 1.1% in the second quarter, marking its strongest performance in over two years. Piper Sandler also increased its price target to $294 from $269, highlighting late-quarter comparable sales strength and maintaining an Overweight rating. Stifel adjusted its price target to $275 from $265, while keeping a Hold rating, noting stronger second-quarter results and positive trends in July. JPMorgan raised its price target to $283 from $280, citing Lowe’s self-help initiatives aimed at improving growth and margins. These recent developments suggest a generally positive outlook from analysts regarding Lowe’s financial performance and strategic initiatives.

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