Lerner New York adds $15 million term loan, lowers revolver pricing

By Angela McDaniels

Tacoma, Wash., Oct. 30 – New York & Co., Inc. indirect subsidiaries Lerner New York, Inc., Lernco, Inc. and Lerner New York Outlet, Inc. amended their loan agreement on Oct. 24 to add a $15 million five-year term loan bearing interest at Libor plus 450 basis points, to extend the revolving credit facility to Oct. 24, 2019 from Aug. 10, 2016 and to reduce pricing on the revolver.

The company plans to use the proceeds of the term loan to pay for its new corporate headquarters, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate on the revolver is now Libor plus a margin of between 150 basis points and 175 bps, depending on the company’s average compliance excess availability.

The fees the company pays to the lenders under the revolver have also been reduced. Now the company pays a monthly fee on outstanding commercial letters of credit at a rate of between 75 bps and 87.5 bps and on standby letters of credit at a rate of between 150 bps and 175 bps, depending on its average compliance excess availability, plus a monthly fee on a proportion of the unused commitments under the revolver at 25 bps.

The revolving borrowing availability is unchanged at $100 million, consisting of a $75 million revolving credit facility (which includes a $45 million subfacility for letters of credit) with a fully committed accordion option that allows the company to increase the revolver up to $100 million or decrease it to a minimum of $60 million.

The maximum borrowing availability under the revolver also remains unchanged and is determined by a monthly borrowing base calculation based on applying specified advance rates against inventory and certain other eligible assets.

Under the loan agreement, the company continues to be subject to a minimum excess availability covenant of $7.5 million.

Wells Fargo Bank, NA is the agent and term loan agent.

New York & Co., Inc. is a New York-based apparel, accessories and footwear company.

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