Jones scratches fixed-charge coverage ratio for redeeming some bonds

By Susanna Moon

Chicago, Dec. 1 - Jones Group Inc. removed the fixed-charge coverage ratio test from its loan covenants on prepayment of its bonds maturing in 2014, according to an 8-K filing with the Securities and Exchange Commission.

The change also applies to permitted acquisitions, investments and restricted payments under the amended terms with JPMorgan Chase Bank, NA as administrative agent and JPMorgan Chase Bank, NA, Toronto Branch as administrative agent for the Canadian lenders.

The minimum availability level for the covenants was raised to 20% from 17.5%.

The company amended the terms on Thursday for the credit agreement that closed April 28. At that time, Jones Group said it lowered fees and interest rates in line with market rates on its $650 million senior credit facility Thursday.

Interest on the loans was reduced to Libor plus 175 basis points to 225 bps.

The maturity date was extended to April 28, 2016.

As noted, the agreement expanded the credit facility's international commitment to allow for the inclusion of European borrowers that may draw under the credit facility.

The credit facility is mainly used as backing for the issuance of trade letters of credit and other supply chain purposes but also may be used for working capital and general corporate purposes.

There was no cash borrowing under the existing facility, Jones said at the time.

Jones Group is a New York-based designer, marketer and wholesaler of apparel, footwear, jeanswear, jewelry and handbags.

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