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Royal Bank of Canada, Others Arrange Revolver Amendment for 99 Cents Only Stores

April 12, 2016, 07:35 AM
Filed Under: Retail

99 Cents Only Stores LLC announced it has successfully completed an amendment and extension of its asset-based revolving credit facility.  Under the amendment, the ABL facility provides commitments of up to $160 million and extends the maturity date by five years to April 8, 2021. Borrowings under the ABL facility are subject to a borrowing base calculated by reference to the company's inventory balance.

Geoffrey Covert, President and Chief Executive Officer, stated, "The ABL Facility is an important part of 99 Cents Only Stores' capital structure and we are very pleased with the successful completion of this five-year amendment. Given the significant inventory reductions we've achieved, coupled with overall improvements in the Company's working capital position, the $160 million in commitments provides more than ample capacity at competitive terms to meet our current and future liquidity needs to grow the business. We appreciate the support and long term commitment that the syndicate of new and existing lenders has demonstrated to the business and our strategy to position 99 Cents Only Stores for long-term growth."

Royal Bank of Canada, UBS AG and Citizens Business Capital acted as Joint Lead Arrangers on the amendment. The amendment also modifies the interest rate margins payable under the ABL Facility. The initial applicable margin for borrowings under the ABL Facility is 2.0% with respect to base rate borrowings and 3.0% with respect to Eurocurrency rate borrowings, and is subject to adjustment each fiscal quarter. The amended ABL Facility provides for maturity on April 8, 2021 or the earlier of (a) 90 days prior to the stated maturity date in respect of the Company's term loan facility (the "Term Loan Facility") and (b) 90 days prior to the stated maturity date in respect of the Company's senior unsecured notes (the "Senior Notes"), if there are any obligations outstanding under the Term Loan Facility or the Senior Notes and the final maturity date of either has not been extended to at least 180 days after April 8, 2021.

Founded in 1982, the company operates 391 extreme value retail stores with 283 in California, 49 in Texas, 38 in Arizona and 21 in Nevada as of December 14, 2015. The company is an extreme value retailer of consumable and general merchandise and seasonal products.

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