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Jones Apparel Group reduces credit line
27 Dec '08
2 min read
Jones Apparel Group Inc announced that it has successfully completed an amendment to its existing $1.25 billion revolving credit facilities. J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were Joint Lead Arrangers in the amendment process. Other titled roles included JPMorgan Chase Bank, N.A. and Citibank N.A. as Syndication Agents, Wachovia Bank, National Association as Administrative Agent and Bank of America, N.A., Barclays Bank PLC and SunTrust Bank as Documentation Agents. The amendment process received broad support with substantially all banks and other financial institutions participating.
Under the amended terms and conditions, the $750 million facility maturing in May 2010 was reduced to $600 million, reflecting Jones' current business needs, and the $500 million facility that matures in June 2009 was terminated. The existing financial covenants have been adjusted to provide Jones with greater flexibility in the operation of its businesses during these unprecedented economic times. Fees and interest rates under the facility increased to current market rates, and Jones will grant certain security for borrowings under the facility. In addition, Jones will pay customary execution fees.
The credit facilities are primarily used as backing for the issuance of trade letters of credit and other supply chain purposes, but also may be used for working capital and general corporate purposes. Currently, no cash borrowings are outstanding under the existing facilities.
John T. McClain, Chief Financial Officer, stated: "We are pleased with the overwhelming support of the financial institutions associated with the amendment process and believe it was prudent to pursue amendments now that allow financial flexibility in the current uncertain economic environment. Our businesses have generated and maintained a significant amount of cash on hand, and we believe that, combined with the $600 million of committed bank credit, provides us with the financial flexibility we need to continue to pursue our multi-brand, multi-channel diversification strategy."
Under the amended terms and conditions, the $750 million facility maturing in May 2010 was reduced to $600 million, reflecting Jones' current business needs, and the $500 million facility that matures in June 2009 was terminated. The existing financial covenants have been adjusted to provide Jones with greater flexibility in the operation of its businesses during these unprecedented economic times. Fees and interest rates under the facility increased to current market rates, and Jones will grant certain security for borrowings under the facility. In addition, Jones will pay customary execution fees.
The credit facilities are primarily used as backing for the issuance of trade letters of credit and other supply chain purposes, but also may be used for working capital and general corporate purposes. Currently, no cash borrowings are outstanding under the existing facilities.
John T. McClain, Chief Financial Officer, stated: "We are pleased with the overwhelming support of the financial institutions associated with the amendment process and believe it was prudent to pursue amendments now that allow financial flexibility in the current uncertain economic environment. Our businesses have generated and maintained a significant amount of cash on hand, and we believe that, combined with the $600 million of committed bank credit, provides us with the financial flexibility we need to continue to pursue our multi-brand, multi-channel diversification strategy."
Jones Apparel Group Inc
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