TD Bank Amends Lakeland Industries Credit Facility
Lakeland Industries, Inc., a global manufacturer of industrial protective clothing for industry, municipalities, healthcare and to first responders on the federal, state and local levels, announced amendments to its primary credit facility with TD Bank. The company is now in compliance with all covenants relating to the revised revolving credit agreement.
The amendments were required as a result of the arbitration award issued against the company in May 2012 and the subsequent entry into a settlement agreement in respect thereof, as well as due to recent operating results of the company, which collectively caused certain events of default under the TD Bank revolving credit facility and term loan facility, including an event of default for failure to comply with the minimum EBITDA covenant, which allowed TD Bank, at its option, to accelerate the loan.
“We are pleased to have successfully amended our credit agreement with TD Bank,” said Lakeland Industries president and CEO Christopher J. Ryan. “The terms of the revised credit facility along with the recently announced Brazil arbitration award settlement remove a great deal of uncertainty for the company. We appreciate that TD Bank has been supportive of our business pursuits and operational challenges. Management of Lakeland now looks forward to working toward international growth for the company.”
The amendments modify the covenants of the former credit facility and as such waive all previous defaults while requiring no forbearance agreements. The revolving credit facility has been revised to a total borrowing commitment of $17.5 million, with a revised expiration date of June 30, 2013 at a maximum interest rate of LIBOR plus 3.50%, with current outstanding borrowings of approximately $15.5 million. The prior credit agreement allowed up to $30 million of borrowing capacity at a maximum interest rate of LIBOR plus 2.50% and had an expiration date of June 30, 2014. The revised credit facility — as well as the prior agreement — requires access fees for all unused portions of the total borrowing capacity provided to the company. With the borrowing base formulas currently in place, the company would be limited to approximately $17.5 million in any case.