Fashion apparel retailer Express entered into two transactions in support of a comprehensive plan to refinance its capital structure and expand its liquidity access while concurrently reducing interest rate exposure and providing flexibility to pay down its outstanding term debt balance.
These two transactions include:
- Increasing the maximum revolver amount by $40 million to $290 million by amending its current $250 million senior secured asset-based revolving credit facility
- Refinancing and reducing Express’ fixed debt exposure by amending its current $140 million senior secured asset-based term loan credit facility, including refinancing its $90 million first-in-last-out term loan and terminating its $50 million delayed draw term loan, of which $43 million was previously paid down.
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“We are pleased to complete these refinancing transactions, which bolster our liquidity access, strengthen our balance sheet, reduce our interest rate exposure and improve our capital structure,” Jason Judd, CFO at Express, said. “We will continue working to reduce debt exposure in 2023. Under the terms of the amended term loan facility, Express can use proceeds from the $52 million CARES Act receivable to pay down outstanding term debt. With enhanced financial flexibility, we believe we are well-positioned to continue executing our EXPRESSway Forward strategy and pursuing growth opportunities.”
Amended Revolving Credit Facility
Express’ current $250 million amended revolving credit facility, jointly led by Wells Fargo Bank and Bank of America, was amended and increased by $40 million to $290 million with Wells Fargo serving as administrative agent and collateral agent. The interest rate has been reduced by replacing the London Interbank Offered Rate (LIBOR) interest rate benchmark, which had an applicable margin of 2.00% to 2.25%, with the Secured Overnight Financing Rate (SOFR) interest rate benchmark, which has an applicable margin of 1.60% to 1.85%. The amended revolving credit facility will mature on Nov. 26, 2027. At current applicable rates, the replacement of LIBOR with SOFR under the amended revolving credit facility reduces interest rate exposure by approximately 40 basis points.
Amended Term Loan Facility
Express’ current $140 million term loan facility was amended by refinancing its $90 million FILO Term loan and terminating its $50 million DDTL. Wells Fargo will serve as administrative agent and collateral agent for the amended term loan facility. ReStore Capital acted as lead lender, with Wells Fargo and Bank of America also participating as lenders. The interest rate has been reduced by replacing LIBOR, which had an applicable margin of 7.00% to 8.25%, as the interest rate benchmark with SOFR, which has an applicable margin of 7.50%. The amended term loan facility will mature on Nov. 26, 2027. At current applicable rates, the replacement of LIBOR with SOFR under the amended term loan facility reduces interest rate exposure by approximately 85 basis points.
Kirkland & Ellis served as legal advisor to the company. Wells Fargo is the administrative agent and the collateral agent for both facilities.
