Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Credit Agreement
On October 30, 2020, Chico's FAS, Inc. (the "Company") and certain material
domestic subsidiaries entered into an Amendment No. 1 (the "Amendment") to that
certain Credit Agreement (the "Credit Agreement"), dated as of August 2, 2018,
by and among the Company, certain material domestic subsidiaries as co-borrowers
and guarantors, Wells Fargo Bank, National Association, as Agent, letter of
credit issuer and swing line lender, and certain lenders party thereto.
The Amendment, among other things, (i) increases the asset-based senior secured
revolving loan (the "ABL") from up to $200 million to up to $285 million, (ii)
extends the maturity from August 2, 2023 to October 30, 2025, (iii) amends the
ABL borrowing base and ties it to accounts receivable, the level of inventory
and the value of certain real estate, (iv) increases the margin on LIBO rate
loans drawn under the ABL from 1.25% to 2.25% (subject to an increase to 2.50%
based upon average quarterly excess availability under the ABL), with a LIBO
rate floor of 0.75%, (v) increases the commitment fee on the unused portion of
the commitments under the ABL from 0.20% to 0.375%, and (vi) amends certain
covenants, including replacing the existing fixed charge coverage ratio covenant
with a minimum excess availability covenant which requires excess availability
to be less than the greater of 10% of the loan cap and $29.25 million.
The Amendment also provides for a $15 million first-in last-out loan (the
"FILO"). The interest rate applicable to FILO loans is equal to, at the
Company's option, either a base rate, determined by reference to the federal
funds rate, or a LIBO rate, plus in each case a margin of 4.5%, with a LIBO rate
floor of 0.75%. The FILO includes a prepayment penalty equal to 1.0% in the
first year, 0.5% in the second year and none thereafter. The FILO can only be
prepaid if there are no outstanding borrowings under the ABL.
The Company's obligations under the Credit Agreement are guaranteed by the
guarantors and secured by a first priority lien on certain assets of the Company
and certain material domestic subsidiaries, including inventory, accounts
receivable, cash deposits, certain insurance proceeds, real estate, fixtures and
certain intellectual property.
As of immediately following entry into the Amendment, there were $134 million in
ABL loans and $15 million of FILO loans outstanding under the Credit Agreement.
The foregoing is only a summary of certain material terms of the Amendment, does
not purport to be complete, and is qualified in its entirety by reference to the
Amendment, which is filed as Exhibit 10.1 hereto, and is incorporated by
reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 "Entry into Material Definitive
Agreements" is incorporated into this Item 2.03 by reference.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits:
Exhibit 10.1 Amendment No. 1 to Credit Agreement, dated as of October
30 , 2020, by and among Chico's FAS, Inc., certain of its
subsidiaries and Wells Fargo Bank, National Association and the
lenders party thereto.
Exhibit 104 Cover Page Interactive Data File - the cover page iXBRL tags are
embedded within the Inline XBRL document
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