Saks amends revolver, increasing availability to $600 million

By Jennifer Chiou

New York, March 28 - Saks Inc. announced amendments to its revolving credit agreement, increasing the maximum availability to $600 million from $500 million and extending the maturity by two years to March 28, 2018.

"Over the last few years, we have taken a number of actions to strengthen our capital structure and our overall financial flexibility, and this amendment is a continuation of that process," Kevin Wills, executive vice president and chief financial officer, said in a press release.

"The amendment extends the facility's maturity to five years and includes more favorable terms. We appreciate the continued support of our bank group and their participation in this enhanced facility."

The release noted that the amendment favorably revised the interest rates and unused line fees.

Borrowings now bear interest at Libor plus 150 basis points to 200 bps, compared to Libor plus 200 bps to 250 bps previously.

Unused fees are now 25 bps to 37.5 bps per year, down from 37.5 bps to 50 bps per year.

The amendment also increases the advance rate for eligible inventory that is included in the borrowing capacity formula to 90% from 85%, the release added.

Saks said that it intends to draw on the revolver and use cash on hand to fund the planned April 15 redemption of its $230 million of 2% convertible senior notes.

The New York-based retailer currently operates 43 Saks Fifth Avenue stores, 65 Saks Fifth Avenue Off 5th stores and the saks.com website.

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