Item 1.01 Entry into a Material Definitive Agreement.
On June 30, 2020, Ross Stores, Inc. (the "Company") entered into a First
Amendment to Note Purchase Agreement (the "NPA Amendment"), amending the Note
Purchase Agreement dated October 17, 2006 (the "Note Purchase Agreement") under
which the Company has outstanding $65,000,000 aggregate principal amount of its
6.53% Series B Senior Notes, due in December 2021 (the "Series B Notes").
The NPA Amendment, among other things, amends certain of the financial covenants
applicable to the Series B Notes, in a manner generally consistent with
corresponding covenants in the Company's existing revolving credit facilities,
which are described in Note E of the Notes to Condensed Consolidated Financial
Statements included in the Company's Quarterly Report on Form 10-Q for the
quarter ended May 2, 2020. The NPA Amendment includes replacement of two prior
covenants (former section 10.1 regarding the ratio of consolidated adjusted debt
to consolidated total capitalization, and former section 10.2 regarding the
adjusted interest coverage ratio) with two updated covenants:
•a Consolidated Adjusted Debt to EBITDAR ratio, requiring a ratio of no less
than 4:50:1.00 beginning with the fiscal quarter ending January 30, 2021 (with
Consolidated EBITDAR determined based upon an annualization of Consolidated
EBITDAR during the first three fiscal quarters ending on and after January 30,
2021).
•a minimum liquidity requirement for the Company to maintain aggregate
unrestricted cash and cash equivalents, plus borrowing availability under the
Company's revolving credit facilities, of at least $800 million while the
Company's existing 364-day senior revolving credit facility remains in effect
(and until the Company provides certification of its compliance with financial
covenants for the quarter ending January 30, 2021), and thereafter of at least
$500 million.
The Series B Notes are otherwise further described in Note D of the Notes to
Consolidated Financial Statements included in the Company's Annual Report on
Form 10-K, filed on March 31, 2020, which description is incorporated by
reference herein. That description is also qualified by reference to the full
text of the Note Purchase Agreement, which was filed as Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q filed on December 6, 2006.
The foregoing description of the NPA Amendment is qualified in its entirety by
reference to the complete terms and conditions of the NPA Amendment, which will
be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ending August 1, 2020.
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