ABERCROMBIE & FITCH CO. (NYSE:ANF) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
Entry into a Material Definitive Agreement.
Second Amendment to Asset-Based Revolving Credit Agreement
As of October19, 2017, Abercrombie & Fitch Management Co. (“A&F Management”), a wholly-owned subsidiary of Abercrombie & Fitch Co. (the “Registrant”), in A&F Management’s capacity as the lead borrower, and the other borrowers and guarantors party thereto, entered into a Second Amendment to Credit Agreement (the “ABL Second Amendment”) with the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent for the lenders (in such capacity, the “ABL Agent”). The ABL Second Amendment amends the Credit Agreement, dated as of August7, 2014 (the “ABL Credit Agreement”), among A&F Management, the other borrowers and guarantors party thereto, the lenders party thereto, the ABL Agent and the other parties thereto, by:
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extending the maturity date of the ABL Credit Agreement from August 7, 2019 to October 19, 2022; |
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reducing the interest rate margin ceiling on amounts borrowed under the ABL Facility to now bear interest at either (a) an adjusted LIBOR rate plus a margin of 1.25% to 1.50% per annum, or (b) an alternate base rate plus a margin of 0.25% to 0.50% per annum based on average historical excess availability during the preceding quarter; |
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modifying the definition of “Borrowing Base” to include provisions to (1) add the ability to include real estate in the borrowing base (capped at 25% of the borrowing base) 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 Term Loan Facility or the Term Loan Facility has been paid in full (2) implement a springing Debt Maturity Reserve, reducing the borrowing base up to an amount equal to the outstanding principal balance of the Term Loans under the Term Facility, 60 days prior to the maturity of the Term Loan Facility unless (a) pro forma Liquidity is greater than or equal to $175 million and (b) pro forma Availability is greater or equal to $100 million. Liquidity is defined as the sum of (a) Availability plus (b) Unrestricted Cash (domestic unrestricted cash plus 80% of foreign unrestricted cash) and (3) provide for a seasonal inventory advance rate increase from 90% to 92.5% from January 1 to March 31; and |
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modifying the ABL Credit Agreement by reducing the letter of credit sub-limit from $100 million to $50 million. |
Except for the changes in the preceding sentences, the terms and conditions of the ABL Credit Agreement remain substantially unchanged. The Registrant does not currently have any outstanding borrowings under the ABL Credit Agreement and is currently in compliance with the ABL Credit Agreement covenants.
The Registrant and its subsidiaries from time to time have had, and may continue to have, various commercial, lending or other relationships with the lenders that are parties to the ABL Second Amendment and the lenders’ respective affiliates.
Further details are contained in, and this description is qualified in its entirety by, the amended ABL Credit Amendment, which will be included as an exhibit to the Company’s quarterly report on Form 10-Q for the fiscal quarter ending October 28, 2017.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The disclosure required by this item is included in Item 1.01 and is incorporated herein by reference.
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About ABERCROMBIE & FITCH CO. (NYSE:ANF)
Abercrombie & Fitch Co. (A&F) is a specialty retailer that operates stores and direct-to-consumer operations. Through these channels, the Company sells products, including casual sportswear apparel, including knit tops and woven shirts, graphic t-shirts, fleece, jeans and woven pants, shorts, sweaters and outerwear; personal care products, and accessories for men, women and kids under the Abercrombie & Fitch, abercrombie kids and Hollister brands. Its segments include Abercrombie, which includes the Company’s Abercrombie & Fitch and abercrombie kids brands, and Hollister. A&F operates approximately 750 stores in the United States and over 180 stores outside of the United States. It operates Websites for each brand, both domestically and internationally. The Websites are available in over 10 languages, accepting over 30 currencies and shipping to over 120 countries. It sources merchandise through over 150 vendors located throughout the world, primarily in Asia and Central America.
