Helen of Troy Limited announced on November 25 2025 that it had amended its existing credit facility, originally dated February 15 2024. The amendment extends the company’s maximum leverage‑ratio holiday, replaces the interest‑coverage ratio with an EBITDA‑based metric, and reduces the revolving credit commitment from $1.0 billion to $750 million while adding an extra interest‑margin tier that applies when the net leverage ratio reaches four times or greater.
Under the new terms, the maximum leverage ratio will gradually decline from 4.50× debt to earnings through November 2026 and to 3.50× by late 2027, with a “leverage holiday” for qualified acquisitions after August 2027. The interest‑coverage covenant now requires a minimum EBITDA‑to‑interest‑expense ratio, aligning the metric with industry practice and providing a more stable benchmark during periods of earnings volatility.
The reduction in the revolving credit facility limits uncommitted liquidity but management expects it will not constrain borrowing capacity in the near term. The added margin tier means borrowing costs will rise if leverage climbs to four times or more, incentivizing disciplined debt management. The amendment preserves the company’s ability to fund growth initiatives while tightening the covenant framework.
Helen of Troy has faced tariff headwinds and consumer caution that have pressured net sales and gross‑profit margins. Recent earnings reports show declining sales and margin compression, partly due to U.S. import tariffs on key raw materials and a softer discretionary‑spending environment. The company’s Project Pegasus restructuring plan and the acquisition of Olive & June are intended to offset these pressures by improving operational efficiency and adding accretive revenue streams.
CFO Brian L. Grass said the amendment was “anticipated” and would give the company “greater flexibility to navigate the evolving trade and macroeconomic landscape.” UBS analysts noted that the credit‑facility changes alleviate a key overhang that had weighed on the stock since the Q2 fiscal 2026 results, but also signaled that underlying fundamentals had not improved as quickly as hoped.
Market reaction was positive, with analysts citing the relief of covenant concerns and the enhanced financial flexibility as key drivers. However, the amendment also underscored the ongoing challenges Helen of Troy faces, including margin pressure and the need for continued cost discipline.
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