On October 15, 2024, Target Corporation (TGT, Financial) announced the entry into a new 364-Day Credit Agreement with a consortium of banks, including Bank of America, N.A. as the administrative agent. This agreement, which replaces a prior credit facility, provides Target with a borrowing capacity of up to $1 billion, with the potential to increase by an additional $500 million.
The new Credit Agreement is set to expire on October 14, 2025, and offers Target the option to convert outstanding loans into term loans due one year after the termination date. The interest rates on borrowings under this agreement are based on a base rate or term SOFR rate, plus an applicable margin that varies according to the type of loan and Target's debt ratings.
Key terms of the agreement include customary representations, warranties, and covenants, including a financial covenant concerning Target's leverage ratio. In the event of default, the administrative agent has the authority to terminate the banks' commitments and demand immediate repayment of any outstanding loans.
This strategic financial move underscores Target's commitment to maintaining robust financial flexibility and supporting its operational and strategic initiatives. The full text of the Credit Agreement will be available in Target's upcoming Quarterly Report on Form 10-Q for the quarter ending November 2, 2024.
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