Bakers Footwear amends $4 million of 9.5% convertible debentures

Final maturity extended, and interest rate to be increased to 12%

By Marisa Wong

Madison, Wis., July 5 - Bakers Footwear Group, Inc. and its investors entered into amendments on June 30 to the $4 million of 9.5% subordinated convertible debentures issued on June 26, 2007 in a private placement, according to an 8-K filed Friday with the Securities and Exchange Commission.

The interest rate on the debentures will be increased to 12% from 9.5%. The debentures will continue to be non-amortizing.

The amendments also defer payment of principal under the debentures. The $4 million principal amount was originally payable on June 30, 2012 but is now to be repaid in four equal installments of $1 million beginning June 30, 2012.

The debentures were previously subject to a refinancing covenant, under which the company is required to refinance the debentures by May 1, 2012 or extend the maturity to a date beyond July 27, 2013. The company's senior lender, Bank of America, NA, consented to the June 30 debentures amendments, which remove the refinancing covenant, allowing the company to make the initial $1 million principal payment on June 30, 2012.

The filing said that the refinancing covenant will be removed as long as the company maintains at least a 1 to 1 ratio of adjusted EBITDA to its interest expense for the 12-month period ending May 26, 2012.

St. Louis-based Bakers is a footwear retailer.

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