Item 1.01 Entry into a Material Definitive Agreement.
Amendment to ABL Credit Facility
On August 12, 2020, Lands' End, Inc. (the "Company") and certain of its
subsidiaries entered into the Second Amendment to Credit Agreement (the "Second
Amendment to the ABL Facility"), by and among Wells Fargo Bank, National
Association (as Agent, L/C Issuer and Swing Line Lender) and each of the
Company's existing lenders under its asset based revolving credit facility. The
Second Amendment to the ABL Facility amends that certain Credit Agreement, dated
November 16, 2017, as previously amended by the First Amendment thereto, dated
December 3, 2019 (as amended, the "ABL Credit Agreement"). The effectiveness of
the Second Amendment to the ABL Facility is conditioned upon the Company paying,
in full, its obligations under the Term Loan Credit Agreement, dated as of April
4, 2014, by and among the Company (as the Borrower), Bank of America, N.A. (as
Administrative Agent and Collateral Agent and as Arranger and Bookrunner) and
the lenders party thereto, as well as other customary closing conditions.
Maximum Borrowings
The Second Amendment to the ABL Facility provides for an increase in the maximum
borrowings under the ABL Credit Agreement by $75 million, from $200 million to
$275 million.
Interest Rate
The interest rates per annum applicable to the loans under ABL Credit Agreement
are based on a fluctuating rate of interest measured by reference to, at the
Company's election, either (1) an adjusted London inter-bank offered rate
("LIBOR") with a minimum rate of 0.75% plus a borrowing margin, or (2) an
alternative base rate ("Base Rate") plus a borrowing margin. As amended by the
Second Amendment to the ABL Facility, the borrowing margin under the ABL Credit
Agreement will be subject to adjustment based on the average daily total loans
outstanding under the ABL Credit Agreement for the preceding fiscal quarter. For
LIBOR loans, the borrowing margin will be, where the average daily total loans
outstanding for the previous quarter are (i) less than $50 million, 1.75%, (ii)
equal to or greater than $50 million but less than $100 million, 2.00%, (iii)
equal to or greater than $100 million but less than $200 million, 2.25%, and
(iv) greater than $200 million, 3.50%. For Base Rate loans, the borrowing margin
will be, where the average daily total loans outstanding for the previous
quarter are (i) less than $50 million for the previous quarter, 1.00%, (ii)
equal to or greater than $50 million but less than $100 million, 1.25%, (iii)
equal to or greater than $100 million but less than $200 million, 1.50%, and
(iv) greater than $200 million, 2.75%.
Commitment Fee
As amended by the Second Amendment to the ABL Facility, if average daily total
loans outstanding for the previous quarter are (i) less than 50% of the lesser
of (a) the aggregate commitments and (b) the borrowing base (the "Loan Cap"),
the commitment fee percentage will equal 0.375% and (ii) equal to or greater
than 50% of the Loan Cap, the commitment fee percentage will equal 0.25%. The
commitment fee is computed as the applicable percentage multiplied by the actual
daily amount by which the aggregate commitments exceed the total outstanding
loans and letter of credit obligations in the preceding quarter.
Maintenance of Cash
The Second Amendment to the ABL Facility will add a cash maintenance provision
to the ABL Credit Agreement, which applies a limit of $75 million on the amount
of cash and cash equivalents (subject to certain exceptions) that the Company
may hold when outstanding loans under the ABL Credit Agreement are equal to or
exceed $125 million.
--------------------------------------------------------------------------------
Other Terms
The Second Amendment to the ABL Facility also addresses LIBOR replacement, as
well as certain compliance and administrative matters.
The foregoing description of the Second Amendment to the ABL Facility is only a
summary of the material terms thereof, and does not purport to be complete.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information described in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference.
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses