Salus Capital Ups FILO Advance for Frederick’s of Hollywood
Frederick’s of Hollywood Group announced that Salus Capital Partners, the company’s lender, has increased the “first in last out” tranche (FILO advance) credit line portion of the company’s $24 million credit facility by $5 million to $14 million.
“By increasing the FILO advance credit line to $14 million, we have greater financial flexibility to work with vendors and invigorate our merchandising strategy, which will play an important role in stabilizing our business. We are focused on reconnecting with our customers by returning to our roots and expanding our offering of core intimate apparel products in order to improve sales,” stated Thomas Lynch, the company’s chairman and chief executive officer. “Salus Capital has been a strong financial supporter of our business by providing us with a credit facility to support our turnaround strategy over the past year. We are excited to receive their continued vote of confidence with improved terms of our credit facility that provide greater financial flexibility.”
According to the company’s 8-K filing, concurrently with the execution of the amendment, the borrowers paid to the lender in cash (i) the outstanding balance of interest under the FILO Advance in the amount of $226,331 and (ii) a one-time fee of $50,000 in consideration for the lender’s agreement to enter into the second amendment. Additionally, as a condition to the lender executing the second amendment, the borrowers entered into an amendment to that certain fee letter, dated as of May 31, 2012, between the borrowers and the lender, pursuant to which the borrowers agreed to an increase in the lender’s collateral monitoring fee from $4,500 to $12,500 per month.