Revolving Credit Agreement

3 Months Ended

May 04, 2019

Line of Credit Facility [Abstract]

Revolving Credit Agreement

Revolving Credit Agreement

At May 4, 2019, the Company maintained an unsecured revolving credit facility that provides a borrowing capacity of $800 million with a $200 million expansion option and matures on August 9, 2022 (“credit agreement”). The credit agreement is available to the Company for general corporate purposes including, among other uses, working capital financing, the issuance of letters of credit, capital expenditures and, subject to certain restrictions, the repayment of existing indebtedness and share repurchases. The Company pays a variable rate of interest on borrowings under the credit agreement and a commitment fee to the participating banks based on the Company's debt rating. The rate of interest on borrowings is LIBOR plus 1.375%, and the commitment fee for unused borrowings is 0.20% per annum.  

At May 4, 2019, no borrowings were outstanding, and letters of credit totaling $21.8 million were issued under the credit agreement leaving unutilized availability under the facility of $778.2 million.

To be in compliance with the financial covenants of the credit agreement, the Company's total leverage ratio cannot exceed 3.5 to 1.0, and the coverage ratio cannot be less than 2.5 to 1.0, as defined in the credit agreement. At May 4, 2019, the Company was in compliance with all financial covenants related to the credit agreement.