Columbia Sportswear Company (the Company) entered into a Credit Agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A., as the administrative agent for the lenders and as a lender (the Administrative Agent), and the other lenders party thereto. The Credit Agreement provides for up to USD 500 million of borrowings in U.S. Dollars pursuant to an unsecured revolving credit facility (the Credit Facility), which is available for working capital and general corporate purposes, including a sublimit for the issuance of letters of credit. The Credit Facility matures on March 19, 2031.
Borrowings under the Credit Facility will bear interest, at the Company's option, at either (a) SOFR plus an applicable margin or (b) a base rate defined as the highest of (i) the Administrative Agent's prime rate, (ii) the higher of the federal funds rate or the overnight bank funding rate set by the Federal Reserve Bank of New York, plus 0.50%, or (iii) the one month SOFR plus 1.00%, in each case plus an applicable margin. The applicable margin for SOFR loans will range from 1.00% to 1.50% based on the Company's funded debt ratio. The applicable margin for base rate loans will range from 0.00% to 0.50% based on the Company's funded debt ratio.
The Credit Agreement includes a financial covenant to maintain a funded debt ratio of not greater than 3.75 to 1.00. For purposes of compliance with the funded debt ratio, domestic cash and cash equivalents, as well as foreign cash and cash equivalents in an amount not to exceed the greater of USD 175 million and 50% of EBITDA, are permitted to be netted from the Company's obligations. The Credit Agreement also contains customary covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness and liens; engage in mergers, acquisitions and dispositions; and engage in transactions with affiliates.
In addition, the Credit Agreement restricts certain payments, including dividends and share buybacks, in an amount over USD 200 million annually, if the Company's funded debt ratio is greater than or equal to 3.25 to 1:00. All borrowings under the Credit Agreement are permitted to be voluntarily prepaid by the Company, provided that the Company for SOFR loans must compensate the Lenders for, and hold the Lenders harmless from, any loss, cost or expense incurred by it as a result of such prepayment. The Lenders may accelerate any repayment of the obligations incurred by the Company under the Credit Agreement only if an event of default occurs.
