Company: CULP
Filing Date: 2025-07-11
Form Type: 10-K
Source: 0000950170-25-095233
Chunk: 16

Company: CULP INC
Filing Date: 2025-07-11
Form: 10-K
Item: Item 7A
Chunk 16
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ABOUT MARKET RISK

Interest Rates

We are exposed to market risk from changes in interest rates regarding our credit agreements.

Revolving Credit Agreement – United States

Our U.S. revolving credit agreement ("Credit Agreement") with Wells Fargo Bank N.A., permits both base rate borrowings and borrowings that require interest to be charged at a variable rate calculated using an applicable margin over SOFR (the secured overnight financing rate administered by the Federal Reserve Bank of New York (or its successor)), as defined in the Credit Agreement. The interest rate under the Credit Agreement as of April 27, 2025, was 5.78%.  As of April 27, 2025, outstanding borrowings under the Credit Agreement totaled $4.6 million.

Credit Agreements - China Operations

Effective November 5, 2024, we entered into an unsecured credit agreement with the Bank of China that provides for a 10.0 million RMB ($1.4 million USD as of April 27, 2025) working capital loan.  Interest is charged at a variable rate under the agreement based on the China Loan Prime Rate ("China LPR") minus 50 basis points, which represents 2.60% as of April 27, 2025.  As of April 27, 2025, the outstanding balance under the working capital loan was 10.0 million RMB ($1.4 million USD).  

Effective March 5, 2025, we entered into a separate unsecured credit agreement with the Agriculture Bank of China ("ABC") that provides for a line of credit of up to 29.0 million RMB ($4.0 million USD as of April 27, 2025).  Interest is charged under this agreement at a variable rate based on the China LPR minus 50 basis points (applicable interest rate of 2.60% as of April 27, 2025).   As of April 27, 2025, the outstanding balance under this agreement was 29.0 million RMB ($4.0 million USD).  

During the first quarter of fiscal 2026 we entered into unsecured working loan agreements with ABC that provide for 21 million RMB ($2.9 million USD as of borrowing dates ranging from May 12, 2025 through May 28, 2025). Interest is charged under these agreements at variable rates based on the China LPR at the time of the borrowing minus 50 basis points