SHORT-TERM BORROWINGS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHORT-TERM BORROWINGS | SHORT-TERM BORROWINGS
VF maintains a $2.25 billion Global Credit Facility that expires in November 2026. VF may request an unlimited number of one-year extensions so long as each extension does not cause the remaining life of the Global Credit Facility to exceed five years, subject to stated terms and conditions; however, granting of any extension is at the discretion of the lenders. The Global Credit Facility may be used to borrow funds in U.S. dollars or any alternative currency (including euros and any other currency that is freely convertible into U.S. dollars, approved at the request of the Company by the lenders) and has a $75.0 million letter of credit sublimit. There were no borrowings under the Global Credit Facility during the years ended March 2024 and 2023. Any borrowings under the Global Credit Facility would currently be priced at a credit spread of 122.5 basis points over the appropriate benchmark interest rate based on Term SOFR or the Euro Interbank Offer Rate ("EURIBOR"), plus a credit spread adjustment of 22.5 basis points for Term SOFR, based on the agreement as amended in April 2024. VF is also required to pay a facility fee to the lenders, currently equal to 15 basis points of the committed amount of the facility. The credit spread and facility fee are subject to adjustment based on VF’s credit ratings. Outstanding short-term balances may vary from period to period depending on the level of corporate requirements.
VF has restrictive covenants on its Global Credit Facility, including a consolidated net indebtedness to consolidated net capitalization financial ratio covenant, as defined in the agreement as amended in April 2024. The calculation of consolidated net indebtedness to consolidated net capitalization ratio permits certain addbacks, including non-cash impairment charges and material impacts resulting from adverse legal rulings, as defined in the amended agreement. Additionally, as amended, the consolidated net indebtedness to consolidated net capitalization ratio financial covenant, as of the last day of any fiscal quarter, cannot be greater than 0.70 to 1.00 through the
last day of the fiscal quarter ending on or about September 30, 2024, then 0.65 to 1.00 through the last day of the fiscal quarter ending on or about September 30, 2025, and 0.60 to 1.00 thereafter. As of March 2024, VF was in compliance with all covenants.
The Global Credit Facility also supports VF’s global commercial paper program for short-term, seasonal working capital requirements and general corporate purposes. VF’s global commercial paper program allows for borrowings of up to $2.25 billion to the extent it has borrowing capacity under the Global Credit Facility. Outstanding U.S. commercial paper borrowings totaled $250.0 million at March 2024 and had a weighted average interest rate of 6.4%. There were no U.S. commercial paper borrowings as of March 2023. In addition to the U.S. commercial paper program, VF commenced a euro commercial paper borrowing program during the second quarter of Fiscal 2024. As of March 2024, there were no outstanding euro commercial paper borrowings under this program. The Company designates its euro commercial paper borrowings as a net investment hedge of VF's investment in certain foreign operations. Refer to Note 25 for additional information. The Global Credit Facility also had $0.6 million and $7.7 million of outstanding standby letters of credit issued on behalf of VF as of March 2024 and 2023, respectively, leaving approximately $2.0 billion and $2.2 billion as of March 2024 and 2023, respectively, available for borrowing against this facility.
VF has $81.2 million of international lines of credit with various banks, which are uncommitted and may be terminated at any time by either VF or the banks. Total outstanding balances under these arrangements were $13.9 million and $11.5 million at March 2024 and 2023, respectively. Borrowings under these arrangements had a weighted average interest rate of 51.6% and 39.1% at March 2024 and 2023, respectively.
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