Genesco gets $400 million restated revolving credit facility

By Marisa Wong

Morgantown, W.Va., Feb. 2 – Genesco Inc. entered into a $400 million fourth amended and restated credit agreement on Jan. 31 that effectively replaces its previous $400 million revolving credit facility, according to an 8-K filing with the Securities and Exchange Commission.

Bank of America, NA, U.S. Bank NA and SunTrust Robinson Humphrey, Inc. are joint lead arrangers and joint bookrunners with Bank of America, NA as agent, U.S. Bank NA and SunTrust Bank as co-syndication agents and PNC Bank, NA as documentation agent.

The credit facility includes, for the company and some U.S. subsidiaries, a $70 million sublimit for the issuance of letters of credit and a domestic swingline subfacility of up to $45 million; for GCO Canada Inc., an up to $70 million revolving credit subfacility, which includes a $5 million sublimit for the issuance of letters of credit and a swingline subfacility of up to $5 million; and for Genesco (UK) Ltd., an up to $100 million revolving credit subfacility, which includes a $10 million sublimit for the issuance of letters of credit and a swingline subfacility of up to $10 million.

Loans to GCO Canada may be made in U.S. or Canadian dollars. Loans to Genesco (UK) Ltd. may be made in U.S. dollars, euros, pounds sterling or other currencies.

The credit facility has a five-year term. Any swingline loans and any letters of credit and borrowings under the Canadian and U.K. subfacilities will reduce the availability under the facility on a dollar-for-dollar basis.

The company has the option, from time to time, to increase the availability under the facility by an aggregate amount of up to $200 million. In connection with this increased facility, the Canadian revolving credit subfacility may be increased by no more than $15 million and the U.K. revolving credit subfacility by no more than $100 million.

The secured credit facility is subject to a borrowing base. The facility also provides that a first-in, last-out tranche could be added to the revolver.

Borrowings bear interest at Libor (or BA rate for Canadian dollar-denominated loans) plus an applicable margin based on average excess availability, subject to a 0% Libor (or BA rate) floor. The applicable margin ranges from 125 basis points to 150 bps and is initially 150 bps.

The company is also required to pay a commitment fee at a rate of 0.25% per year.

The company is not required to comply with any financial covenants unless excess availability is less than the greater of $25 million or 10% of the loan cap, which is the lesser of the facility amount and the borrowing base. If that occurs, the company must meet a minimum fixed-charge coverage ratio of not less than 1.0 to 1.0.

The credit facility permits the company to incur senior debt in an amount up to the greater of $500 million or an amount that would not cause the company’s ratio of consolidated total indebtedness to consolidated EBITDA to exceed 5.0 to 1.0.

In addition, the facility contains cash dominion provisions that apply in the event that the company’s excess availability is less than the greater of $30 million or 12.5% of the loan cap for three consecutive business days or if some events of default occur.

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

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