Abercrombie & Fitch extends ABL facility to 2022, reduces pricing

By Marisa Wong

Morgantown, W.Va., Oct. 19 – Abercrombie & Fitch Management Co., a wholly owned subsidiary of Abercrombie & Fitch Co., amended its ABL credit agreement to extend the maturity date to Oct. 19, 2022 from Aug. 7, 2019, according to an 8-K filing with the Securities and Exchange Commission.

The company entered into the second amendment to its credit agreement dated Aug. 7, 2014 with Wells Fargo Bank, NA as administrative agent on Thursday.

The amendment reduces the interest rate margin ceiling. Borrowings now bear interest at Libor plus a margin of 125 basis points to 150 bps, based on average historical excess availability during the preceding quarter.

The company also modified the definition of borrowing base to include provisions to add the ability to include real estate in the borrowing base (capped at 25%) at an advance rate of 60% of the fair market value, subject to satisfactory due diligence provided the real estate is no longer recognized as collateral to the company’s term loan or the term loan has been paid in full; to implement a springing debt maturity reserve, reducing the borrowing base up to an amount equal to the outstanding principal balance of the term loans, 60 days prior to the maturity of the term loan unless pro forma liquidity is greater than or equal to $175 million and pro forma availability is greater or equal to $100 million; and to provide for a seasonal inventory advance rate increase from 90% to 92.5% from Jan. 1 to March 31.

In addition, the amendment reduces the letter-of-credit sublimit to $50 million from $100 million.

The company does not currently have any outstanding borrowings under the ABL credit agreement and is currently in compliance with the facility’s covenants, the filing noted.

Abercrombie & Fitch is a New Albany, Ohio-based retailer of casual apparel for men, women and kids.

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