American Apparel amends minimum EBITDA covenant under Lion loan

By Susanna Moon

Chicago, Oct. 1 - American Apparel, Inc. amended the credit agreement with lenders Lion Capital (Americas) Inc. and Lion/Hollywood LLC to eliminate the minimum consolidated EBITDA covenant for the remainder of 2010, according to an 8-K filing with the Securities and Exchange Commission.

The amended agreement also provides for the minimum consolidated EBITDA covenant to be tested monthly in 2011.

The company said it entered into the fourth amendment to its credit agreement with Lion on Sept. 30.

Wilmington Trust FSB is the administrative agent and collateral agent.

Lion/Hollywood also has an investment agreement with American Apparel, with board representation and registration nights. Lion also received a warrant exercisable at any time to purchase 16 million common shares at $2.00 per share.

American Apparel is a vertically integrated manufacturer, distributor and retailer of branded fashion basic apparel based in Los Angeles.

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