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SUBSEQUENT EVENT
6 Months Ended
Jul. 30, 2016
SUBSEQUENT EVENT  
SUBSEQUENT EVENT

 

12.SUBSEQUENT EVENT

 

On August 15, 2016, The Bon-Ton Department Stores, Inc. and certain subsidiaries as borrowers and certain other subsidiaries as obligors entered into a Fourth Amendment (the “Fourth Amendment”) to the Second Amended Revolving Credit Facility which, among other changes, increased the A-1 Tranche of the Second Amended Revolving Credit Facility to a commitment of $150,000 (from the previous commitment of $100,000). This amendment brings total revolving commitments under the Second Amended Revolving Credit Facility to $880,000 ($730,000 under Tranche A and $150,000 under Tranche A-1).

 

Borrowings under the Second Amended Revolving Credit Facility bear interest at either (1) Adjusted LIBOR (equal to the London Interbank Offered Rate for an interest period selected by the borrowers) plus an applicable margin or (2) a base rate (based on the highest of (a) the Federal Funds Rate plus 0.5%, (b) the Bank of America prime rate, and (c) Adjusted LIBOR based on an interest period of one month plus 1.0%) plus the applicable margin. The applicable margins in respect of the Tranche A-1 facility under the Fourth Amendment will be 9.5% for LIBOR loans and 8.5% for base rate loans. The applicable margins in respect of the Tranche A facility continue to be based upon the excess availability under the Second Amended Revolving Credit Facility.

 

The financial covenant contained in the Second Amended Revolving Credit Facility requires that the minimum excess availability be an amount greater than or equal to the greater of (1) 10% of the lesser of: (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time and (2) $75,000. In addition, the Fourth Amendment requires that if, at any time on or after January 29, 2017 and for so long as excess availability under the loan agreement is less than 20% of the lesser of (a) the aggregate commitments at such time and (b) the aggregate borrowing base at such time, the fixed charge coverage ratio shall be at least 1.00 to 1.00.

 

The proceeds of the loans under the Tranche A-1 facility were used to repay existing Tranche A-1 loans and a portion of Tranche A loans and to pay fees and expenses incurred in connection with the Fourth Amendment.