Macy’s Inc. has decided to make changes in its current bank credit agreement, with Bank of America and J.P. Morgan. The changes suggest that the amount of credit facility of the company amounting to $2 billion and its maturity date of August 31, 2012 remain the same, helping the company support its capital needs in the present economic crunch. %% Despite the fact that the company ahs been holding up a good credit agreement with the banks so far, it intends to maintain its healthy flexibility in the current economic situation and hence is seeking the amendments. The company has paid of $950 million debt that is maturing in 2009, a sign of its healthy financial status, according to company sources. %% The changes in the bank credit agreement refers to both financial covenants of the bank credit agreement. A leverage covenant directs a shift from debt-to-capitalization to debt-to-EBITDA (earnings before interest, taxes, depreciation and amortization), which is considered a market-based approach eliminating calculation of any potential future non-cash goodwill or asset impairment charges. Also, the interest coverage ratio was altered from 3.25 times to 3 times to October. 30, 2010, from where onwards it would become 3.25 times, again. The changes brought about an increase in fees and pricing and also for credit protection. The agreement will be implemented from 5 January 2009, after the conditions are agreed upon. The company has no current borrowings against this credit agreement. During 2008 fall season, its peak borrowing needs were $163 million, over $1 billion in 2007. Macy’s has paid off its current year’s fall season borrowings.