Delta Apparel amends loan covenant; amendment triggers 25-bps step-up

By Marisa Wong

Madison, Wis., Oct. 1 – Delta Apparel, Inc. entered into a third amendment on Friday to its fourth amended and restated loan and security agreement dated May 27, 2011 with Wells Fargo Bank, NA to amend some definitions and ease borrowing base availability thresholds, according to an 8-K filing with the Securities and Exchange Commission.

Specifically, the third amendment amends borrowing base availability thresholds relating to a financial testing covenant during the period from Sept. 28, 2014 through Oct. 31, 2015.

In addition, the definition of fixed-charge coverage ratio was amended to adjust for expenses that may be incurred in connection with strategic initiatives and to exclude the $9 million payment due on Sept. 30, 2014 in connection with the Aug. 27, 2013 purchase of assets and properties of Salt Life Holdings, LLC.

In consideration for the amendment, the company paid Wells Fargo and the other lenders an aggregate fee of $362,500. In addition, interest rates were increased by 25 basis points on the loans available under the existing loan agreement.

Greenville, S.C.-based Delta Apparel designs, markets and manufactures activewear apparel and headwear.

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