SWK Adds $1.25B Liquidity Cushion with New 364-Day Revolver
Rhea-AI Filing Summary
Stanley Black & Decker (NYSE:SWK) filed an 8-K disclosing a new $1.25 billion 364-day revolving credit facility signed on June 23 2025 with Citibank and a syndicate of banks.
The facility, available in USD or EUR, matures on June 22 2026 and can be converted into a one-year term loan. No funds were drawn at closing. Interest is tied to the Base Rate, Term SOFR or EURIBOR plus a margin.
Covenants require an interest-coverage ratio ≥2.5× through Q2 2026, reverting to 3.5× thereafter; EBITDA add-backs are capped at $250 million over any four-quarter period. A change-of-control event could trigger mandatory prepayment.
The company simultaneously amended its $4.0 billion five-year credit agreement to mirror the relaxed covenant and paid lenders a one-time 1 bp fee. The 2024 364-day facility was terminated.
- Improves short-term liquidity for general corporate purposes.
- Provides financial flexibility but increases potential leverage.
Positive
- Secured a $1.25 billion 364-day revolving credit facility, enhancing near-term liquidity.
- Temporary reduction of interest-coverage covenant to 2.5× through Q2 2026 increases financial flexibility during operational restructuring.
Negative
- Facility permits additional borrowing that could elevate leverage to potentially >3× EBITDA if fully drawn.
Insights
TL;DR: New $1.25 B revolver boosts liquidity with lenient covenants—credit not yet drawn.
Liquidity: The undrawn 364-day facility nearly equals 8 % of FY-24 sales, adding immediate borrowing headroom without balance-sheet impact.
Covenants: Temporary reduction of the interest-coverage test to 2.5× signals management’s desire for cushion while restructuring its Consumer Tools segment. The change matches the amendment to the five-year revolver, eliminating uneven compliance risk.
Cost: Pricing is market-based; upfront fees appear de minimis. Option to term-out borrowings mitigates refinancing risk in mid-2026.
Implication: Overall positive for liquidity and financial flexibility; EPS dilution risk is minimal unless the facility is materially drawn.
TL;DR: Covenant relief hints at weaker earnings outlook; leverage headroom grows.
The lower 2.5× coverage threshold suggests management anticipates EBITDA pressure over the next five quarters. Although undrawn, the revolver could lift gross debt by up to $1.25 B if utilized, potentially pushing net leverage beyond 3× based on LTM figures.
Change-of-control and customary default language protect lenders, while add-back caps limit aggressive adjustments. The one-year term-out option concentrates refinancing risk into 2027 should cash flows lag.
Net effect is credit-neutral: extra liquidity offsets incremental leverage capacity, but the covenant relaxation raises questions on medium-term earnings durability.
8-K Event Classification
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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| Item 1.01 | Entry into a Material Definitive Agreement. |
364-Day Credit Agreement
On June 23, 2025, Stanley Black & Decker, Inc., a Connecticut corporation (the “Company”), entered into a 364-Day Credit Agreement (the “364-Day Credit Agreement”) with each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citibank, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., and Wells Fargo Securities, LLC, as lead arrangers and book runners, and Bank of America, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Bank, National Association, as syndication agents. The 364-Day Credit Agreement consists of a $1.25 billion revolving credit loan, which may be drawn by the Company and its subsidiaries which are designated as Designated Borrowers under the 364-Day Credit Agreement (each, a “364 Borrower”). The Company guarantees its obligations and the obligations of each 364 Borrower under the 364-Day Credit Agreement.
Borrowings under the 364-Day Credit Agreement may be made in U.S. Dollars or Euros, pursuant to the terms of the 364-Day Credit Agreement. Borrowings under the 364-Day Credit Agreement bear interest at rates equal to, at the option of the Company, the Base Rate, the EURIBO Rate or Term SOFR (as such terms are defined in the 364-Day Credit Agreement) plus the applicable margin specified in the 364-Day Credit Agreement.
The Company must repay all advances under the 364-Day Credit Agreement by the earlier of (i) June 22, 2026 or (ii) the date of termination in whole, at the election of the Company, of the commitments by the lenders under the 364-Day Credit Agreement (the “364 Termination Date”). The Company may, however, convert all advances outstanding on the 364 Termination Date into a term loan (“Term Loan”), provided that the Company, among other things, pays a fee to the administrative agent for the account of each lender. The Term Loan shall be repaid in full no later than the first anniversary of the 364 Termination Date.
Each 364 Borrower may prepay advances, subject to the terms and conditions of the 364-Day Credit Agreement. In addition, upon a change of control, the Company may be required to prepay any borrowings under the 364-Day Credit Agreement upon request of the lenders holding at least a majority of the commitments under the 364-Day Credit Agreement.
The proceeds under the 364-Day Credit Agreement may be used solely for general corporate purposes. None of the proceeds from the 364-Day Credit Agreement were drawn down at closing.
The 364-Day Credit Agreement contains customary affirmative and negative covenants that include, among other things:
| • | maintenance of an interest coverage ratio; |
| • | a limitation on creating liens on certain property of the Company and its subsidiaries; |
| • | a restriction on mergers, consolidations, liquidations or sales of substantially all of the assets of the Company or its subsidiaries; and |
| • | a restriction on entering into certain sale-leaseback transactions. |
The Company must maintain, for each period of four consecutive fiscal quarters of the Company, an interest coverage ratio of not less than 3.50 to 1.00, provided that the Company is only required to maintain an interest coverage ratio of not less than 2.50 to 1.00 for any four fiscal quarter period ending on or before the end of the Company’s second fiscal quarter of 2026. For purposes of calculating the Company’s compliance with the interest coverage ratio, the Company is permitted to increase EBITDA by an amount equal to the Applicable Adjustment Addbacks (as defined in the 364-Day Credit Agreement), provided that the sum of the Applicable Adjustment Addbacks incurred in any four consecutive fiscal quarter periods ending on or before the end of the Company’s second fiscal quarter of 2026 shall not exceed $250,000,000 in the aggregate.
The 364-Day Credit Agreement contains customary events of default. If an event of default occurs and is continuing, the Company may be required to repay all amounts outstanding under the 364-Day Credit Agreement.
The description contained herein is a summary of certain material terms of the 364-Day Credit Agreement and is qualified in its entirety by reference to the 364-Day Credit Agreement attached as Exhibit 10.1 hereto and incorporated herein by reference.
Amendment No. 1 to Five Year Credit Agreement
Reference is made to that certain Amended and Restated Five Year Credit Agreement, dated as of June 28, 2024, by and among the Company, the banks, financial institutions and other institutional lenders party thereto, and Citibank, N.A., as administrative agent for
the lenders (the “5-Year Credit Agreement”). On June 23, 2025, the Company, the lenders identified on the signature pages thereto, and Citibank, N.A., as agent for the lenders, entered into Amendment No 1. to the 5-Year Credit Agreement (“Amendment No. 1 to 5-Year Credit Agreement”).
Amendment No. 1 to 5-Year Credit Agreement: (i) amends the definition of “Adjustment Period” to mean any period of four consecutive fiscal quarters that ends on or before the end of the Company’s second fiscal quarter of 2026; (ii) amends the definition of “Applicable Adjustment Addbacks” such that the sum of the Applicable Adjustment Addbacks incurred in any Adjustment Period shall not exceed $250,000,000 in the aggregate; and (iii) modifies the requirement that the Company must maintain, for each period of four consecutive fiscal quarters of the Company, an interest coverage ratio of not less than 3.50 to 1.00, to provide that the Company shall only be required to maintain an interest coverage ratio of not less than 2.50 to 1.00 for any Adjustment Period.
Pursuant to Amendment No. 1 to 5-Year Credit Agreement, the Company has paid each of the lenders executing Amendment No. 1 to 5-Year Credit Agreement a one-time amendment fee in an amount equal to one basis point of each executing lender’s commitment amount under the 5-Year Credit Agreement.
The description contained herein is a summary of certain material terms of Amendment No. 1 to 5-Year Credit Agreement and is qualified in its entirety by reference to Amendment No. 1 to5-Year Credit Agreement attached as Exhibit 10.2 hereto and incorporated herein by reference.
| Item 1.02 | Termination of a Material Definitive Agreement. |
In connection with its entry into the 364-Day Credit Agreement, the Company terminated that certain 364-Day Credit Agreement, dated June 28, 2024, with each of the initial lenders named therein, Citibank, N.A., as administrative agent, Citibank, N.A., BofA Securities, Inc., JPMorgan Chase Bank, N.A., and Wells Fargo Securities, LLC, as lead arrangers and book runners, and Bank of America, N.A., JPMorgan Chase Bank, N.A., and Wells Fargo Bank, National Association, as syndication agents.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information provided in Item 1.01 is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number |
Description | |
| 10.1 | 364-Day Credit Agreement, made as of June 23, 2025 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A. as administrative agent for the lenders. | |
| 10.2 | Amendment No. 1 to Amended and Restated Five Year Credit Agreement, made as of June 23, 2025 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A. as administrative agent for the lenders. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| STANLEY BLACK & DECKER, INC. | ||||||
| Date: June 26, 2025 | By: | /s/ Janet M. Link | ||||
| Name: | Janet M. Link | |||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||