After defaulting on its roughly $93.85 million in debt, denim apparel maker Joe's Jeans Inc. (JOEZ) is in talks with its lenders in the hopes of reaching an amendment or waiver to avoid an immediate debt repayment.
The Los Angeles designer, producer and seller of apparel and apparel-related products under the Joe's and Hudson brands disclosed in a filing with the Securities and Exchange Commission that it failed to comply with the Ebitda covenant on its term loan as of Sept. 30, causing a default on its debt.
The company's $60 million term loan with administrative agent Garrison Loan Agency Service LLC was priced at 12%, but the interest rate increased by 200 basis points, to 14%, due to the default, the Nov. 14 SEC filing said. The company owes roughly $59.93 million on the term loan, which is set to mature on Sept. 30, 2018.
Joe's Jeans also is in default on its revolving credit facility and factoring facility with CIT Commercial Services Inc. About $33.93 million is outstanding on the financing, and $13.73 million is available to borrow, the SEC filing said.
The $50 million revolver matures on Sept. 30, 2018, and consists of a $1 million tranche and a $50 million tranche, minus what is outstanding on the $1 million tranche. The smaller tranche is priced at an alternative base rate plus 250 basis points or Libor plus 350 basis points, while the larger tranche is priced at Libor plus 250 basis points.