Business Context and Reporting Period
Company: Capri Holdings Ltd
Filing Type: Form 8-K (Current Report)
Date of Report: April 3, 2022
Event Date: April 2, 2022 (11:59 p.m. ET)
Context: The filing reports a significant corporate event regarding the company's credit facilities and collateral status.
Key Financial Metrics
This filing does not report specific revenue, profit, cash flow, or margin figures. The primary financial metric disclosed is the credit rating status of the company's senior long-term, unsecured debt.
- Rating Status: Investment grade.
- Rating Agencies: Two of three specified agencies.
- Duration: Maintained for two consecutive full fiscal quarters.
Material Changes
The material change reported is the release of collateral securing the company's obligations under its Credit Facility (revolving credit facility and term loan facility).
- Trigger: Meeting the criteria of maintaining an investment-grade rating for two consecutive quarters.
- Collateral Released: Substantially all assets and certain registered intellectual property of Capri and certain subsidiaries.
- Effective Date: April 3, 2022.
- Notification: The administrative agent (JPMorgan Chase Bank, N.A.) was notified on April 3, 2022.
Outlook, Risks, and Management Commentary
Management Commentary: The filing confirms that the company has successfully met the covenant requirements to unencumber its assets, indicating improved creditworthiness relative to the terms of the Credit Agreement dated November 15, 2018.
Risks and Contingencies: The filing does not disclose new risks or contingencies. It references the Annual Report on Form 10-K for the year ended March 27, 2021, for additional details regarding the Credit Facility.
Investor Verification Checklist
- Verify the specific credit ratings assigned by the two agencies and the status of the third agency.
- Review the Credit Agreement (Exhibit 10.1 to the 2021 10-K) to understand the specific covenants and future requirements for maintaining the unsecured status.
- Confirm the list of assets and intellectual property that were previously pledged and are now released.
- Monitor future filings to ensure the investment-grade rating is maintained to prevent re-pledging of assets.