Revolving Line of Credit

6 Months Ended

Jul. 29, 2017

Revolving Line of Credit

Revolving Line of Credit

4.    Revolving Line of Credit

Interest on borrowings under our $350.0 million senior secured asset-based revolving credit facility (“ABL Facility”) is computed based on our average daily availability, at our option, of: (x) the higher of (i) the Federal Funds Rate plus 1/2 of 1.00%, (ii) the bank's prime rate and (iii) the London Interbank Offered Rate (“LIBOR”) plus 1.00%,  plus in each case, an applicable margin of 0.25% to 0.75% or (y) the bank's LIBOR rate plus an applicable margin of 1.25% to 1.75%. The effective interest rate was approximately 3.30% and 2.00% during the thirteen weeks ended July 29, 2017 and July 30, 2016, respectively and approximately 2.80% and 2.00% during the twenty-six weeks ended July 29, 2017 and July 30, 2016, respectively.

In June 2016, we amended the agreement governing the ABL Facility to exercise the $75.0 million accordion feature which increased the then-available aggregate revolving commitments from $140.0 million to $215.0 million and increased the sublimit for the issuance of letters of credit from $10.0 million to $25.0 million. The other terms of the ABL Facility were not changed by the amendment.

In June 2017, we entered into the Sixth Amendment to the agreement governing the ABL Facility in order to, among other things, modify the definition of the borrowing base to include certain assets of a newly formed subsidiary guarantor.

In July 2017, we entered into the Seventh Amendment to the agreement governing the ABL Facility (the “ABL Amendment”) which increased the aggregate revolving commitments from $215.0 million to $350.0 million, and increased  the sublimit for the issuance of letters of credit from $25.0 million to $50.0 million and the sublimit for the issuance of swingline loans from $10.0 million to $20.0 million. In addition, the maturity of the ABL Facility was extended to the earlier of July 27, 2022 and the date that is 91 days prior to the maturity date (as such date may be extended) of the term loan entered into on June 5, 2015 under a first lien credit agreement (the “First Lien Agreement”), certain pricing thresholds were adjusted, and certain covenant restrictions were loosened. While the revolving credit loans outstanding under the ABL Facility will continue to be secured by substantially all of our assets with a first priority lien on ABL priority collateral and a second priority lien (as between the ABL facility lenders and the term loan facility lenders) on all non-ABL priority collateral, real property will no longer form part of the collateral under the ABL Facility. The other terms of the ABL Facility remain substantially the same.

As of July 29, 2017, approximately $167.6 million was outstanding under the ABL Facility, approximately $0.8 million in face amount of letters of credit had been issued and we had availability of approximately $84.4 million. As of July 29, 2017, we were in compliance with all covenants prescribed in the ABL Facility.