Tapestry Inc Announces New 2 Billion Dollar Revolving Credit Facility With Extended Maturity To 2030

On May 22, 2025, Tapestry Inc (NYSE: TPR), a leading global house of luxury lifestyle brands, announced the execution of a new $2 billion unsecured revolving credit facility with a syndicate led by Bank of America. This new agreement replaces the previous revolving credit facility dated May 2022, extending the maturity to May 2030 and enhancing financial flexibility for Tapestry and its subsidiaries.

Key Highlights of the New Revolving Credit Facility: - Commitment Amount: \(2 billion, with an incremental increase option of up to \)750 million subject to conditions. - Maturity Date: Extended to May 22, 2030, providing a long-term liquidity runway. - Multi-currency Availability: Loans may be borrowed in U.S. Dollars, Euros, Pounds Sterling, and Japanese Yen. - Letters of Credit: Up to \(125 million available for standby letters of credit supporting operational activities including leases and insurance. - Swing Line Loans: Facility allows up to \)50 million for short-term loans. - Interest Rates: Variable based on base rates such as the secured overnight financing rate and adjustable margins tied to Tapestry’s Gross Leverage Ratio (debt/EBITDAR) with a maximum covenant threshold of 4.0x, extendable to 4.5x following material acquisitions.

Financial Impact and Context: As of fiscal year 2024, Tapestry reported revenues of \(6.67 billion and total liabilities of approximately \)10.5 billion, including \(6.94 billion in long-term debt. The company held \)6.14 billion in cash and cash equivalents, resulting in a conservative debt-to-equity ratio of 0.3841, reflecting a robust financial position. This new credit facility improves capital structure flexibility, supporting working capital, capital expenditures, dividends, and share repurchases.

Strategically, this refinancing allows Tapestry to manage its capital efficiently amidst fluctuating global economic conditions, including economic uncertainty and potential tariff impacts relevant to its manufacturing and distribution operations. The extended maturity reduces refinancing risk and positions Tapestry to pursue growth initiatives with confidence.

The facility also contains customary restrictive covenants to ensure disciplined financial management, including limitations on additional debt, liens, acquisitions, and affiliate transactions. The covenants maintain a balance between operational flexibility and protection of lender interests.

Historical Alignment: In prior earnings calls, Tapestry’s management emphasized the importance of maintaining a strong liquidity position and manageable leverage ratios as pillars for sustainable growth and shareholder value creation. This new credit facility aligns perfectly with those strategic financial goals by providing a reliable capital base through 2030.

For more detailed information, please refer to the full SEC filing here: Tapestry 8-K May 22 2025.

Tags: TPR, Tapestry Inc, Q2 2025, revolving credit facility, debt refinancing, financial flexibility