20. Subsequent Event
Term Loan Amendment
On February 4, 2013 (the “Second Amendment Effective Date”), the Company, Chinos Intermediate Holdings B, Inc., Bank of America, N.A., as administrative agent, and each lender party thereto entered into Amendment No. 2 to the Credit Agreement (the “Second Term Loan Amendment”), which modified the Company’s Term Loan Facility. The Second Term Loan Amendment replaced loans outstanding under the Term Loan Facility with a new class of term loans in an aggregate principal amount of $1,179 million (the “New Term Loans”). The maturity date of the New Term Loans is March 7, 2018 and was not modified as part of the amendment.
Borrowings under the Term Loan Facility bear interest at a rate per annum equal to an applicable margin plus, at the Company’s option, either LIBOR (subject to a floor) or the base rate, as defined. Pursuant to the Second Term Loan Amendment, the applicable margin on New Term Loans is reduced by 0.25% to 3.00% for LIBOR borrowings and 2.00% for base rate borrowings. In addition, the floor with respect to LIBOR borrowings is reduced by 0.25% to 1.00%. The Second Term Loan Amendment also provides for an incremental 0.25% step-down in applicable margin at any time on and after May 6, 2013 when the Company’s corporate family rating, as publicly announced by Moody’s, is B1 or better. Following the amendment, the applicable margin with respect to base rate borrowings is 2.00% and the LIBOR Floor and applicable margin with respect to LIBOR borrowings are 1.00% and 3.00%, respectively
The Second Term Loan Amendment provided for a soft-call option, whereby the Company will pay a premium equal to 1.0% of the outstanding principal amount of New Term Loans prepaid, refinanced, substituted or otherwise replaced, or the terms of which are amended, in connection with certain repricing transactions occurring on or prior to the date that is six months after February 4, 2013.