Orchard Supply expands asset-based loan to $145 million, gets waiver

By Jennifer Chiou

New York, Feb. 15 - Orchard Supply Hardware Stores Corp. entered into an amendment and waiver under its credit agreement, expanding the borrowing capacity to $145 million by adding a $17.5 million supplemental term loan, according to an 8-K filed with the Securities and Exchange Commission.

Wells Fargo Bank, NA acted as the administrative agent and collateral agent for the asset-based facility with Wells Fargo Capital Finance and Bank of America, NA.

On Feb. 14, Orchard and certain of its subsidiaries entered into a waiver of any and all defaults or events of default under the term loan agreement as a result of any failure by the company to comply with the maximum adjusted leverage ratio covenant for the fiscal quarter ended Feb. 2 and ending May 4.

The filing stated that the next measurement date for the leverage covenant is Aug. 3.

JPMorgan Chase Bank, NA acted as term administrative agent and collateral agent,

Proceeds from the expanded credit facility will be used for general working capital purposes.

"We are very pleased to have expanded our credit facility, as planned, and improved our financial flexibility, both of which provide additional liquidity as we enter our peak spring selling season," president and chief executive officer Mark Baker said in a news release.

"We are gratified by the ongoing support of our lenders as we continue our work with Moelis & Co. and our financial partners to achieve a sustainable capital structure that will best position the company for long-term success."

Orchard Supply is a San Jose, Calif.-based hardware retailer.

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