99 Cents Only amends term loan, extending maturity date to 2022

By Wendy Van Sickle

Columbus, Ohio, Nov. 7 – 99 Cents Only Stores LLC completed an amendment to its term loan that extended its term by three years to Jan. 13, 2022, according to a press release.

The loan is subject to a springing maturity at June 1, 2019 if a certain percentage of its senior notes due 2019 remain outstanding at that time.

In connection with the amendment, about $130 million of the existing first-lien term loans held by the company’s equity sponsors were converted to a new pay-in-kind second-lien term loan facility.

The first-lien loan will bear interest at Libor plus 500 basis points plus an additional 150 bps to be paid in kind. The second-lien term loan’s interest is to be paid in kind at a rate equal to Libor plus 850 bps.

Lenders approving the amendment received an upfront fee of 50 bps at closing.

The amendment also increased the junior lien capacity under the company’s term loan facility, including for refinancing, and includes certain term lender-friendly covenant modifications.

In addition, the company effected corresponding amendments to its ABL facility to permit the transactions contemplated by the amendment.

“We are pleased to have completed the amendment and extension of our term loan, which significantly improves our liquidity and debt maturity profile, providing additional runway to execute our turnaround plan,” Geoffrey J. Covert, president and chief executive officer of 99 Cents, said in the release.

“During the first half of fiscal 2018 the company has achieved strong operating performance, with new product offerings, robust same store sales growth and adjusted EBITDA up more than 40% compared to the same period a year ago. This transaction reflects significant support from our stakeholders and will enable us to continue to drive operational momentum and generate profitable long-term growth.”

99 Cents is a City of Commerce, Calif.-based operator of extreme value stores.

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