Columbia Sportswear Company (NASDAQ:COLM) announced Thursday it has entered into a new unsecured revolving credit agreement with JPMorgan Chase Bank, N.A. and other lenders, providing the company with up to $500 million in available borrowings. The facility, which can be used for working capital and general corporate purposes, matures on March 19, 2031.
According to the press release statement, borrowings under the credit facility will bear interest at either a rate based on the Secured Overnight Financing Rate (SOFR) plus a margin ranging from 1.00% to 1.50%, or a base rate plus a margin ranging from 0.00% to 0.50%. The applicable margin is determined by Columbia Sportswear’s funded debt ratio.
The agreement includes a financial covenant that requires the company to maintain a funded debt ratio not greater than 3.75 to 1.00. The calculation allows for netting domestic cash and cash equivalents, as well as foreign cash and equivalents up to the greater of $175 million or 50% of EBITDA, from the company’s obligations.
The credit agreement also contains customary covenants that limit the company’s ability to incur additional debt, liens, mergers, acquisitions, and certain affiliate transactions. If the company’s funded debt ratio is at or above 3.25 to 1.00, restrictions will apply to dividends and share buybacks exceeding $200 million annually.
Columbia Sportswear may voluntarily prepay borrowings under the agreement, with compensation for certain costs if SOFR loans are prepaid. Lenders may accelerate repayment if an event of default occurs.
In connection with the new facility, Columbia Sportswear terminated its previous credit agreement dated July 12, 2022, with JPMorgan Chase Bank. The company reported no outstanding loans under the prior agreement, and all obligations have been paid, except for letters of credit, which have been transferred to the new facility.
This information is based on a statement in a press release filed with the Securities and Exchange Commission.
In other recent news, Columbia Sportswear reported its fourth-quarter 2025 earnings, which significantly exceeded expectations. The company achieved an earnings per share (EPS) of $1.73, surpassing the forecasted $1.19 by 45.38%. Revenue for the quarter reached $1.07 billion, slightly above the projected $1.04 billion. Additionally, Stifel raised its price target for Columbia Sportswear to $68 from $60, maintaining a Buy rating. The research firm attributed this adjustment to a more favorable outlook, citing stronger-than-anticipated earnings guidance. Stifel also noted that the impact of tariffs was less severe than expected, and share repurchase activity was favorable. These developments highlight Columbia Sportswear’s improved financial performance and optimistic future projections.
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