Genesco ups revolver to $332.5 million, adds $17.5 million FILO loan

By Rebecca Melvin

New York, June 9 – Genesco Inc. said it has increased the maximum borrowings under its existing revolving credit facility by $57.5 million to $332.5 million, and added a $17.5 million FILO term loan, according to an 8-K filing with the Securities and Exchange Commission.

The expansion was achieved by the second amendment to the fourth amended and restated credit agreement with Bank of America, NA.

The amendment also includes some covenants and restrictions.

The amendment adds a floor of 1% to Libor, the banker’s acceptance rate, the Canadian prime rate and the U.S. index rate, while the FILO term loan bears interest at a varying rate.

The borrowing base for the revolver has been expanded to include certain real estate, and the real estate may not constitute more than 15% of the domestic borrowing base.

The FILO term loan is subject to a borrowing base equal to the sum of specified lower percentages of the borrowers’ eligible inventory, eligible wholesale receivables and eligible credit card and debit card receivables. The base also includes eligible trade names. If the outstanding FILO term loan exceeds its borrowing base, the amount of such excess reduces availability under the domestic borrowing base.

The collateral securing the credit facility has been expanded in connection with the increased credit facility. It now includes a perfected first priority lien on, and security interest in domestic intellectual property, including the eligible trade names, and such assets will remain as collateral for the increased credit facility until the FILO loan is paid in full. Additionally, any eligible real estate added to the domestic borrowing base will be pledged as collateral for the increased credit facility, and the company has the ability to release real estate from the pledged collateral subject to specified conditions.

The amendment adds customary real estate covenants to the credit agreement. It is not required to comply with any financial covenants unless excess availability is less than the greater of $22.5 million or 10% of the loan cap. If excess availability is less than the greater of $22.5 million or 10% of the loan cap, the credit agreement requires the company to meet a minimum fixed charge coverage ratio of an amount equal to consolidated EBITDA less capital expenditures and taxes paid in cash, in each case for such period, to fixed charges for such period, of not less than 1:1. The amendment also restricts the borrowers from drawing on the credit if there is cash in certain controlled accounts and concentration accounts that exceed specified thresholds. The thresholds for such restrictions are $50 million for domestic borrowings, C$5 million for Canadian borrowings and £5 million for borrowings in the United Kingdom.

Genesco is a Nashville-based retailer of branded footwear, licensed and branded headwear and licensed sports apparel and accessories.

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