Aeropostale extends loan maturity, reduces maximum credit extensions

By Marisa Wong

Morgantown, W.Va., Aug. 24 – Aeropostale, Inc. entered into a fourth amendment to its third amended and restated loan agreement on Aug. 18 to extend the maturity date, according to an 8-K filing with the Securities and Exchange Commission.

The maturity date was extended until at least Feb. 21, 2019, with automatic extensions, under certain circumstances, to Aug. 18, 2020.

The amendment also reduces the maximum principal amount of extensions of credit that may be made under the loan agreement to $215 million from $230 million.

In addition, the amendment provides for a seasonal increase in the advance rate on inventory under the borrowing base formula for the company’s revolving credit facility.

The amendment increases to $40 million the maximum aggregate principal amount of loans that may be borrowed under the FILO loan facility and provides for an annual decrease, beginning in 2017, in the advance rate under the borrowing base formula for FILO loans.

The company also added General Electric Capital Corp. as a lender under the loan agreement.

The reduction in the maximum principal amount of extensions of credit was primarily driven by the company’s strategic decision to close underperforming stores over the last 18 months, thus reducing inventory levels, the filing noted.

Bank of America, NA is the agent for the third amended and restated loan agreement, dated Sept. 22, 2011.

The young adult clothing retailer is based in New York.

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