Chico’s extend loan maturity, replaces Libor, trims margins

By Marisa Wong

Los Angeles, Feb. 4 – Chico’s FAS, Inc. entered into a second amendment on Feb. 2 to its credit agreement dated Aug. 2, 2018 with Wells Fargo Bank, NA as agent, letter-of-credit issuer and swingline lender to extend the maturity date to Feb. 2, 2027 from Oc. 30, 2025, according to an 8-K filed Friday with the Securities and Exchange Commission.

The amendment also replaces Libor benchmark provisions with term SOFR benchmark provisions and decreases the margin under the asset-based senior secured revolving loan to SOFR plus 160 basis points, subject to a further decrease to SOFR plus 135 bps or an increase to SOFR plus 185 bps based on average quarterly excess availability. The rate on first-in last-out loans was decreased to SOFR plus 360 bps, subject to a further decrease to SOFR plus 335 bps or an increase to SOFR plus 385 bps based on average quarterly excess availability.

In addition, the amendment removes the anti-cash hoarding condition under the credit agreement and amends some covenants, including amending the minimum excess availability covenant to require excess availability of the greater of 10% of the loan cap or $20 million.

Immediately following entry into the amendment, there were $84 million of ABL loans and $15 million of FILO loans outstanding under the credit agreement.

Chico’s is a Fort Myers, Fla.-based specialty retailer.

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