Phoenix Footwear Group entered into a bank financing agreement with NewStar Business Credit.

On February 2, 2015, Phoenix Footwear Group entered into a loan and security agreement with NewStar Business Credit that provides for up to $9 million in borrowing capacity consisting up to $8 million with a five-year maturity and a term loan of $1 million. The principal amount of the term loan is payable in 36 equal monthly installments of $27,778, plus accrued interest, on the first day of each calendar month beginning March 1, 2015.

Interest accrues on the principal amount outstanding under the revolving credit facility at the rate equal to the greater of the rate per annum published on each Business Day in the “Money Rates” table of The Wall Street Journal as the one-month LIBOR rate, adjusted daily, and 1.0% plus 3.75%. Interest accrues on the principal amount outstanding under the Term Loan at the rate equal to the LIBOR Rate plus 5.0%.

James Riedman, president and CEO of Phoenix Footwear, said, “We have grown for three consecutive years, the last two of which have been at four times the industry average. We are especially pleased to be able to secure this additional capacity to fund our continued growth, while at the same time, reduce our capital costs.”

The agreement includes various financial and other covenants with which the company has to comply in order to maintain borrowing availability and avoid penalties, including maintaining minimum tangible net worth and minimum fixed charge coverage ratios.

At the closing under the loan agreement, the company used proceeds from the term loan and the revolver to pay in full the obligations outstanding under that loan and security agreement dated July 30, 2012 between the company and Alostar Bank of Commerce, which carried an annual interest rate of 6.5% plus a monthly fee of $2,000, and that loan and security agreement dated July 30, 2012 between the company and Gibraltar Business Capital which carried an annual interest rate of 18%. Those agreements were terminated.

Carlsbad, CA-headquartered Phoenix Footwear Group specializes in women’s and men’s footwear.