Vince amends credit agreements to allow intellectual property sale

By Mary-Katherine Stinson

Lexington, Ky., April 24 –Vince Holding Corp.’s wholly owned indirect subsidiary Vince LLC amended its credit agreements on April 21 to allow for the sale of all its intellectual property assets under the Vince Brand to ABG-Viking LLC, an indirect subsidiary of Authentic Brands Group, LLC, according to an 8-K filing with the Securities and Exchange Commission.

Vince entered a consent and second amendment to its ABL credit agreement dated Sept. 7, 2021 which amended the agreement to permit the intellectual property asset sale, replace the interest rate benchmark with SOFR from Libor subject to a credit spread adjustment of 10 basis points annually and increase the applicable margin to 275 bps for SOFR loans.

The amendment also reduced the lenders’ commitments to $70 million as of the asset sale closing date, $65 million as of June 30, $60 million as of July 31, $55 million as of Sept. 30 and $25 million as of Dec. 31, 2023.

The maturity date of the ABL agreement was amended to June 30, 2024.

The amendment also reduced the capacity to incur debt and liens, make investments, restricted payments and dispositions and repay certain debt, modified certain terms impacting the calculation of the ABL agreement’s borrowing base, modified certain reporting requirements, set the minimum excess availability covenant at $15 million, removed cash dominion event qualifications of Vince and certain of its subsidiaries under the agreement and modified certain representations and warranties, covenants and events of default in respect of documentation related to the asset sale.

Citizens Bank, NA is the administrative agent, collateral agent and letter of credit issuer for the ABL agreement.

Also, Vince entered a consent and third amendment to its third-lien credit agreement dated Dec. 11, 2020.

It amended the third-lien credit agreement to permit the sale of Vince’s intellectual property, replaced the interest rate benchmark with SOFR from Libor subject to a credit spread adjustment of 10 bps annually.

It also extended the third-lien credit agreement’s maturity date to the earlier of March 30, 2025 and 180 days after the maturity date under the ABL credit agreement.

Additionally, it reduced the capacity to incur debt and liens, make investments, restricted payments and dispositions and repay certain debt and modified certain representations and warranties, covenants and events of default in respect of documentation related to the asset sale.

SK Financial Services, LLC is the administrative agent and collateral agent for the third-lien agreement.

The asset sale, in which Vince will transfer the intellectual property to AGB Viking for a cash consideration of $76.5 million and a 25% ownership stake in AGB Viking, is expected to close in May.

It is subject to several conditions such as approval by Vince’s stockholders and the company’s performance and satisfaction of obligations under the asset purchase agreement.

Proceeds are expected to be used to prepay in full the Vince’s existing term loan and a portion of the outstanding loans under its existing asset-based revolving credit facility.

Vince is a clothing company headquartered in New York City.

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