| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 23, 2022, Express, Inc. (the “Company”) and certain of its subsidiaries amended its (i) existing $140 million Senior Secured Asset-Based Term Loan Credit Facility (as amended, the “Amended Term Loan Facility”) and (ii) existing $250 million Senior Secured Asset-Based Revolving Credit Facility (as amended, the “Amended Revolving Credit Facility”). The Amended Term Loan Facility refinanced the $90 million “first in, last out” term loan facility (the “FILO Term Loan”) and $50 million delayed draw term loan facility (the “DDTL”; together with the FILO Term Loans, the “Existing FILO Loans”), each previously scheduled to mature on May 24, 2024, with a new $90 million “first in, last out” term loan facility (the “Amendment FILO Term Loan”). The Amended Revolving Credit Facility increased the maximum revolver amount by $40 million to $290 million. Funding of the Amendment FILO Term Loan administered under the Amended Term Loan Facility and the applicable loans administered under the Amended Revolving Credit Facility occurred on November 28, 2022. Additional details regarding the Amended Term Loan Facility and the Amended Revolving Credit Facility are set forth below.
Amended Term Loan Facility
On November 23, 2022 (the “Signing Date”), the Company, Express Topco LLC (“Express Topco”), Express Holding, LLC (“Express Holding”), Express, LLC (the “Borrower”), Express GC, LLC (“Express GC”), Express Finance Corp. (“Express Finance”), Express Fashion Logistics, LLC (“Express Fashion”) and Express Fashion Operations, LLC (together with Express Holding, the Borrower, Express GC, Express Finance and Express Fashion, the “Loan Parties”), each (other than the Company) a direct or indirect, wholly-owned subsidiary of the Company, entered into the First Amendment to Asset-Based Term Loan Agreement and First Amendment to Security Agreement, among the Loan Parties, Wells Fargo Bank, National Association (“Wells Fargo”), as administrative agent and collateral agent, and the other lenders named therein. The Amended Term Loan Facility is a senior secured obligation that ranks equally with the Loan Parties’ other senior secured obligations.
The Amended Term Loan Facility (i) refinanced the outstanding principal balance of the Existing FILO Loans with the Amendment FILO Term Loan and (ii) modified the interest rate and maturity date of the Existing FILO Loans. The previous maturity date of the Existing FILO Loans of May 24, 2024 was extended by the Amended Term Loan Facility to the earlier of November 26, 2027 or the maturity date of the Amended Revolving Credit Facility. Additionally, the Amended Term Loan Facility replaced the London Interbank Offered Rate (“LIBOR”) as the interest rate benchmark with the Secured Overnight Financing Rate (“SOFR”) interest rate benchmark.
Amounts borrowed under the Amended Term Loan Facility will bear interest at a variable rate indexed to SOFR plus 7.50% per annum. Amounts borrowed under the Amended Term Loan Facility will now be repaid in quarterly installments, commencing with the fiscal quarter beginning on or about January 29, 2023 in the principal amount of (i) $2,250,000, for each such installment payable on or prior to the first date after the effectiveness of the Amended Term Loan Facility as of which a mandatory prepayment of the Amendment FILO Term Loan has been made pursuant to mandatory prepayments in connection with amounts related to the Coronavirus Aid, Relief, and Economic Security Act proceeds and (ii) $1,125,000, for each such installment payable thereafter. Voluntary prepayments under the Amended Term Loan Facility are permitted at any time upon proper notice and subject to minimum dollar amounts and, in certain instances, a prepayment fee. The Borrower is also obligated to pay other customary closing fees, arrangement fees and administration fees for a credit facility of this size and type.
Amended Revolving Credit Facility
On the Signing Date, the Loan Parties entered into the Third Amendment to Second Amended and Restated Asset-Based Loan Credit Agreement and First Amendment to Second Amended and Restated Security Agreement, among the Loan Parties, the lenders party thereto, Wells Fargo, as administrative agent and collateral agent, and Bank of America. The Amended Revolving Credit Facility amends the Loan Parties’ existing asset-based revolving credit facility, which was previously scheduled to expire on May 24, 2024. The maturity date was extended by the Amended Revolving Credit Facility to the earlier of November 26, 2027 or the maturity date of the Amended Term Loan Facility.
