Aeropostale to place convertible preferred stock with Sycamore

Conversion would give investor 12.3% of company's common stock

By Angela McDaniels

Tacoma, Wash., March 13 - Aeropostale, Inc. plans to issue convertible preferred stock to Sycamore Partners, according to a company news release.

The convertible preferreds give Sycamore Partners the right to acquire up to 5% of the company's common stock at an exercise price of $7.25 per share, which is equal to the company's closing share price on Wednesday.

Combined with Sycamore Partners' current ownership of Aeropostale's outstanding common stock, Sycamore Partners' ownership on an as-converted basis would increase to 12.3%.

The convertible preferreds will be issued under the terms of a commitment letter Aeropostale signed with Sycamore Partners for a strategic partnership and $150 million of senior secured credit facilities.

Barclays acted as placement agent and financial adviser.

Aeropostale is a mall-based specialty retailer of casual apparel for young women and men. It is based in New York.

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