As part of its restructuring, Claire’s Stores amended its credit agreement with a group of lenders and avoided defaulting on its loans. Credit Suisse served as administrative agent for the transaction.

According to a related 8-K, the lender group consisted of Goldman Sachs, ING Capital, JPMorgan Chase and Royal Bank of Canada.

Pursuant to the third amendment, the company completed a refinancing of the U.S. credit facility as follows:

• The U.S. credit facility was reduced to $75 million less any amounts outstanding under the ABL credit facility, the maturity was extended to February 4, 2019 and certain covenants were modified.
• Claire’s Gibraltar is party to a new $40 million credit agreement maturing February 4, 2019 with the lenders, the proceeds of which were used to reduce outstanding amounts under the U.S. credit facility by $40 million.
• The company, its domestic subsidiaries and Claire’s are parties to a new ABL credit agreement maturing February 4, 2019, providing for revolving credit loans, subject to borrowing base availability, in an amount up to $75 million less any amounts outstanding under the U.S. credit facility.

Upon the delivery of financial statements for the end of Q2/16 to the lenders, the company would have been in default. However, the third amendment provided a waiver of this default prior to the effectiveness of the refinancing, and upon effectiveness, changed the total net Secured Leverage Ratio covenant so this default would not arise.

Claire’s Stores is a specialty retailer of jewelry and accessories for young women, teens, tweens and girls ages three to 35.