Foot Locker, Inc. entered into an amended credit agreement with its banks, providing for a $175 million revolving credit facility and extending the maturity date to May 16, 2011, according to a filing with the SEC. The credit agreement also provides for an incremental facility of up to $100 million. Simultaneously with entering into the credit agreement, the company repaid the $88 million that was outstanding on its term loan with the banks, which was scheduled to mature in May 2009.



The credit agreement provides that the company comply with certain financial covenants, including (i) a fixed charge coverage ratio of 1.25:1 for the 2008 fiscal year, 1.50:1 for the 2009 fiscal year, and 1:75:1 for each year thereafter and (ii) a minimum liquidity/excess cash flow covenant, which provides that if at the end of any fiscal quarter minimum liquidity is less than $350 million, then excess cash flow for the four consecutive fiscal quarters ended on such date must be at least $25 million. The amount permitted to be paid by the company as dividends in any fiscal year has been increased to $105 million under the terms of the credit agreement.


With regard to stock repurchases, the agreement continues to provide that not more than $50 million in the aggregate may be expended unless the fixed charge coverage ratio is at least 2.0:1 for the period of four consecutive fiscal quarters most recently ended prior to any stock repurchase. Additionally, the agreement continues to provide for a security interest in certain of the company's intellectual property and certain other non-inventory assets.