Christopher & Banks Corporation (NYSE: CBK), a specialty women’s apparel retailer, today announced it has entered into a new senior secured revolving credit facility (the “New Credit Facility”) in the amount of up to $50 million with Wells Fargo Capital Finance, part of Wells Fargo & Company (NYSE: WFC). The New Credit Facility provides committed revolving funding through July 2017, and replaces the Company’s $50 million credit facility that was scheduled to mature on June 30, 2014.
Peter G. Michielutti, Senior Vice President, Chief Financial Officer of Christopher & Banks, commented, “We are pleased to have successfully completed our New Credit Facility under favorable terms. This New Credit Facility will provide Christopher & Banks with enhanced liquidity and greater capital flexibility with fewer covenants, as compared to the prior credit facility. The completion of this financing provides us additional support to execute our operating and strategic plans.”
The amount of credit that is available under the New Credit Facility is determined as a percentage of the value of eligible inventory, credit card receivables and, subject to post-closing requirements, owned real estate, as reduced by certain reserves, all as more fully described in the New Credit Facility. The funds from the New Credit Facility may be used for working capital, issuance of letters of credit, capital expenditures and other corporate purposes.
The New Credit Facility contains one financial covenant, which requires the Company to maintain excess availability at all times equal to at least the greater of: (i) 10% of the Loan Cap (as defined in the New Credit Facility) and (ii) $3 million, in each case, as further described in the New Credit Facility. The Company does not currently anticipate borrowing under the New Credit Facility, but does intend to continue its use of letters of credit primarily with respect to purchasing goods from certain of its apparel vendors.
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