Global luxury apparel and accessories brand Vince Holding reached an agreement to amend its senior secured term loan facility to waive the consolidated net total leverage ratio covenant requirement through, and including, the first quarter of fiscal 2019.

According to a related 8-K filing, Bank of America served as administrative agent for the transaction.

The effectiveness of the term loan amendment is conditioned upon the company receiving at least $30 million of proceeds in connection with the company’s potential rights offering, including any backstop commitment from Sun Capital Fund V, an affiliate of the company’s majority shareholder, and using a portion of such proceeds to prepay $9 million in principal amount of outstanding loans under the term loan facility. As a result, the term loan amendment may not be effective prior to July 31, 2017, which is the date on or around when the consolidated net total leverage ratio covenant is next tested.

The company also reached an agreement to amend its revolving credit facility, immediately providing an additional $5 million in borrowing capacity under such facility, which may be increased by an additional $5 million. This amendment relies on an exchange for the issuance of a letter of credit in the same amount for the benefit of the revolving credit facility lender by Bank of Montreal. The letter of credit may be increased by an additional $5 million, in which case the company’s availability under the revolving credit facility would also increase by such amount. In addition, the amendment allows Vince to include larger portions of certain trade receivables in the borrowing capacity until July 31, 2017. The company agreed to a 0.5% increase in the interest rate and is required to pay $15 million of the outstanding debt under the revolving credit facility upon the completion of the proposed rights offering without any concurrent commitment reduction, which will create an equal amount of borrowing capacity under the facility upon paydown.

Brendan Hoffman, CEO, said, “We are very pleased to have obtained amended agreements with our lenders. These steps, together with the completion of our proposed rights offering, will provide Vince with additional liquidity and improve the capital structure of the company.”

Headquartered in New York, Vince products are sold in approximately 2,300 distribution locations across more than 40 countries.