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Destination Maternity enters into $25M term loan facility

Specialty apparel retailer Destination Maternity Corp. entered into a five-year $25 million senior secured term loan facility with Pathlight Capital LLC and Wells Fargo Bank NA, according to a Feb. 1 announcement.

The loan will bear interest at the London Interbank Offered Rate of 9% each year. The company intends to use the proceeds to repay its existing term loan due March 2021.

The clothing company added that it reached an agreement with Wells Fargo to extend its current revolving credit facility to have the same scope as the new term loan. The companies also agreed to other modifications that will give Destination Maternity increased borrowing flexibility.

The retailer has drawn $22.5 million of the term loan with the option to draw the remaining $2.5 million. When it fully draws the term loan, it expects the arrangements to produce $10 million of additional borrowing availability in excess.

The company added that Guggenheim Securities LLC acted as the lead arranger of the financing and Pepper Hamilton LLP acted as its legal adviser.