Zumiez Extends $25M Credit Agreement With Wells Fargo
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- June 12 2009
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Zumiez, Inc. announced it has entered into a new $25 million secured credit agreement with Wells Fargo HSBC Trade Bank. The agreement basically extends a similar agreement with the company that was set to expire on August 30, 2009.
According to the release:
The Credit Agreement provides the Company with a senior revolving credit facility through September 1, 2011 of up to $25.0 million (the “New Facility”). The New Facility replaces the Company’s $25.0 million secured revolving credit facility with Wells Fargo, which was scheduled to terminate on August 30, 2009
Amounts outstanding under the New Facility will bear interest either at a fluctuating rate per annum equal to 1% above the Daily One Month LIBOR Rate (as defined in the Revolving Line of Credit Note) or at a fixed rate of 1% above LIBOR in effect on the first day of an applicable fixed rate term. The Company’s obligations under the New Facility are secured by a first priority lien in the Company’s accounts receivable, general intangibles, inventory, equipment and fixtures. The Company must also provide financial information and statements to Wells Fargo. The New Facility contains financial covenants that require the Company to meet a certain quick ratio at the end of each fiscal quarter and to not exceed a specified net loss after taxes threshold on a trailing four-quarter basis. The New Facility also contains certain negative covenants that generally limit the Company’s ability to, among other things, incur additional indebtedness or enter into certain transactions.
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