Hartmarx Corp. has amended and restated its $200 million revolver to lower pricing and extend the tenor for three years on the back of improved financials and debt reduction. "If the company can get lower rates it is to our advantage, but we need the agreement of the lender group too," said Glenn Morgan, Hartmarx's cfo. "So they assessed the situation and concluded that it was appropriate to lower the rates."
Total debt has declined and earnings are up for the maker of business, casual and golf apparel. As of last November, borrowings under the facility were $81 million. Hartmarx reduced the borrowing costs on the asset-based facility by approximately 75 basis points for LIBOR borrowings. Last year, the rate averaged LIBOR plus 2 1/4%. The amendment also reduced rates on outstanding letters of credit by 25 basis points.
Hartmarx had the opportunity to extend the maturity one year to 2007, but instead opted for three years to 2009 with the option of a further year. "We have a very good working relationship with our lender group and both sides had expressed interest in the facility," Morgan said. Congress Financial Corp. leads the facility. J.P. Morgan is syndication agent and Wells Fargo Foothill served as documentation agent. LaSalle Bank, CIT Group, UPS Capital Corp., Whitehall Business Credit Corp. and RZB Finance are the other lenders in the unchanged syndicate.