Nike (NKE) Enters $1B 364-Day Credit Facility

On March 8, 2024, Nike (NYSE: NKE) entered into a Credit Agreement with Bank of America, N.A., as administrative agent, and the other financial institutions named therein as lenders (the “364‑Day Credit Agreement”). The 364‑Day Credit Agreement provides for up to $1.0 billion of borrowings pursuant to a 364-day unsecured revolving credit facility (the “364‑Day Credit Facility”), which is available for working capital and general corporate purposes, including supporting the issuance of commercial paper. In addition to loans in U.S. Dollars, borrowings under the 364‑Day Credit Facility will be available in Canadian Dollar, Euro, Sterling, Yen and any other currency that is freely convertible into U.S. Dollars and agreed to by the administrative agent and the then existing lenders. The 364-Day Credit Facility matures on March 7, 2025, assuming the maturity date is not extended.
The Company may, upon the agreement of either of the then existing lenders or of additional banks not currently party to the 364-Day Credit Agreement, increase the commitments under the 364-Day Credit Facility to up to $1.5 billion. The Company may also request renewal of the 364‑Day Credit Facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which term loan would mature no later than the anniversary of the then effective termination date.
As of March 8, 2024, the Company is the only borrower under the 364-Day Credit Facility. However, the 364‑Day Credit Agreement allows for the Company to designate additional subsidiary borrowers from time to time. In the event that any subsidiary of the Company becomes a borrower, the Company has agreed to provide a guarantee in respect of any such subsidiary’s obligations in relation with the revolving credit facility.
Borrowings under the 364-Day Credit Facility will bear interest, at the Company’s option, at either (a) Term SOFR plus 0.10% plus an applicable margin or (b) a base rate defined as the highest of (i) the Bank of America “prime rate”, (ii) the federal funds effective rate plus 0.50% and (iii) one month Term SOFR plus 1.00%. The applicable margin for Term SOFR loans will range from 0.3575% to 0.690% based on the public ratings of the Company’s long-term, senior unsecured, non-credit enhanced indebtedness for borrowed money. The Company may select interest periods of one, three or six months for Term SOFR loans, subject to availability. Interest shall be payable at the end of the selected interest period, but no less frequently than quarterly.
The 364-Day Credit Agreement contains covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional liens; engage in mergers, acquisitions and dispositions; and use proceeds of loans under the 364-Day Credit Facility. The 364‑Day Credit Agreement does not include any financial covenants.

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