Pier 1 Imports subsidiary amends revolver, details new term loan B

By Marisa Wong

Madison, Wis., April 30 - Pier 1 Imports, Inc. said wholly owned subsidiary Pier 1 Imports (U.S.), Inc. amended its $350 million senior secured revolving credit facility and syndicated and closed its previously announced $200 million seven-year senior secured term loan B.

Pier 1 entered into the new $200 million term loan B facility with Bank of America, NA as administrative and collateral agent, Merrill Lynch, Pierce, Fenner & Smith Inc. and Wells Fargo Securities, LLC as joint lead arrangers and joint lead bookrunners, according to a press release.

Interest on the term loan is equal to Libor plus 350 basis points, subject to a 1% Libor floor.

The term loan matures on April 30, 2021 and is subject to quarterly amortization of principal at 0.25% of the original principal amount, with the balance due at maturity.

In addition, the company is subject to an annual excess cash flow repayment requirement, beginning with the fiscal year ending February 2015.

The term loan is secured by a second lien on all assets previously pledged as security under the revolver and a first lien on substantially all other assets of some of the company's subsidiaries.

The term loan does not require the company to comply with any financial maintenance covenants.

Proceeds from the $200 million term loan will be used for general corporate purposes, including working capital needs, capital expenditures, cash dividends and repurchases of common stock.

Pier 1 amended its $350 million asset-based revolver to allow borrowings under the new term loan facility.

The revolver is secured by the company's U.S. and Canadian inventory and third-party credit card receivables and other related assets and is subject to a floating borrowing base. With the new term loan facility, the revolver is also secured on a second-lien basis by substantially all other assets of some of the company's subsidiaries.

Substantially all of the other terms and conditions under the revolver remain unchanged.

As of Wednesday, the company had no cash borrowings under the revolver and $43 million in outstanding letters of credit.

Pier 1 is a Fort Worth-based importer of home decor and furniture.

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