Retailer Saks Inc. announced it has entered into an amended and restated asset-based revolving credit agreement. The amendment extends the maturity date of this facility to November 22, 2013. The maximum committed borrowing capacity of the amended facility remains at $500 million. The loan will be used for working capital needs and general corporate purposes.
Wells Fargo Retail Finance, UBS Securities, Regions Business Capital and GE Capital Markets were joint lead arrangers and joint bookrunning managers for the transaction. GE Capital, Corporate Retail Finance announced it was a co-lender.
Kevin Wills, EVP and CFO of the company noted, "We are very pleased to announce the extension and amendment of our revolving credit facility, which was arranged by Walls Fargo Retail Finance, and the degree of support we received from the participating financial institutions.”
He added, "This year, we undertook a series of important actions that strengthened our capital structure and will provide considerable flexibility going forward. In addition to the extension and amendment of the revolving credit facility, we issued $120 million of convertible notes in May, and we completed a $100 million common stock offering last month. Proceeds of those transactions were used to reduce borrowings on our revolving credit facility." As of October 31, 2009 (the end of the third fiscal quarter), the company had no direct outstanding borrowings on the revolving credit facility.
"GE has participated in our revolving credit facility for a number of years and we appreciate their continued support," Wills added in a GE press release.
"Clients value our ability to provide significant amounts of capital, especially as they continue to grow and evolve," said Jim Hogan, managing director of GE Capital, Corporate Retail Finance. "Borrowers also benefit from a lender who truly understands their industry and the unique factors that impact their bottom line."
The amendment revises certain terms and covenants to the existing revolving credit facility. While the borrowing capacity formula based on eligible collateral remains substantially unchanged, the new interest rates vary with usage and are in the range of LIBOR plus 3.5% to 4.0%. The facility is subject to no financial covenants unless the availability falls below $87.5 million. At that time, the company is subject to a fixed charge coverage ratio of at least 1:1. The credit facility is available for working capital, the issuance of letters of credit, capital expenditures, and other general corporate purposes.
Based in New York, NY, Saks, Inc. offers luxury goods including apparel, shoes, accessories and jewelry through its 53 Saks Fifth Avenue and OFF 5th store locations and online at saks.com.
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