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Abercrombie & Fitch Negotiates Refinancing Deal

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U.S. teen and young adult retailer Abercrombie & Fitch (A&F) is negotiating the refinancing of its credit facilities while interest rates are low and will likely remain so for the short term.

The company’s existing credit facilities consist of a $350 million unsecured revolving credit facility maturing July 27, 2016, and a $150 million loan maturing February 23, 2017. If the complex credit facilities and debt restructuring agreement go as planned, A&F will obtain a $400 million revolving credit line secured by assets and with a 5-year maturity, and an additional loan of $325 million with a 7-year maturity.

Part of the new term loan would be used to retire the $131.5 million debt outstanding from an existing loan, to pay off $60 million in obligation incurred from the old credit line, and to pay various additional transactional costs and fees.

A&F treasurer Everett Gallagher said, “The proposed refinancing we have initiated is an opportunity for A&F to take advantage of current favorable credit markets and increase financial flexibility for the company in the future.”

Participants and agents for A&F in its refinancing plans include Goldman Sachs, J.P. Morgan Securities, PNC Capital Markets and Wells Fargo Securities.

Albany, Ohio-based A&F operates 842 stores in the U.S., and a combined 157 stores in Canada, Europe and Asia. Sales revenue for the quarter ending May 3, 2014, was $822 million with a gross profit reported as $512 million. The company’s brands include Abercrombie, Hollister and Gilly Hicks.

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