Citi Trends, Inc. (NASDAQ: CTRN) today announced that it has secured a new, five-year, $50 million credit facility through Bank of America to replace its prior $20 million credit facility.
“We are pleased to announce the successful completion of this credit facility which expands our borrowing capacity and extends the maturity,” said David Alexander, the Company’s President and Chief Executive Officer. “Based on our existing strong cash level and current projections of future cash flow, we do not expect to borrow under the facility in the foreseeable future. Nevertheless, we believe that this new credit facility provides us with substantially greater long-term financial flexibility.”
The new facility includes a $25 million uncommitted “accordion” feature that under certain circumstances could allow the Company to increase the size of the facility to $75 million. Borrowings, if any, under the facility will bear interest (a) for LIBOR Rate Loans, at LIBOR plus 1.5%, or (b) for Base Rate Loans, at a rate equal to the highest of (i) the prime rate plus 0.5%, (ii) the Federal Funds Rate plus 1.0%, or (iii) LIBOR plus 1.5%. The facility is secured by the Company’s inventory, accounts receivable and related assets, but not its real estate, fixtures and equipment. The facility contains one financial covenant, a fixed charge coverage ratio, which is tested only in certain circumstances.
About Citi Trends
Citi Trends, Inc. is a value-priced retailer of urban fashion apparel and accessories for the entire family. The Company operates 507 stores located in 28 states. Citi Trends’ website address is www.cititrends.com. CTRN-E
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