American Apparel secures refinancing

American Apparel has completed refinancing of its secured

debt. The dancing staples retailer has recently closed a private offering of the 206 million dollars of its 13 percent senior secured notes due in 2020.

"Our new debt arrangements, coupled with improved financial performance, will provide added flexibility in delivering upon our operating plan for 2013 and beyond," said Dov Charney, American Apparel's chairman and CEO.

American Apparel has also entered into a new 35 million dollars five-year asset-backed revolving credit deal with Capital One Bank, as the fashion retailer announced earlier this month. American Apparel used the net proceeds from the offering of notes, together with borrowings from the new credit line, to repay and terminate its prior credit facilities with Lion Capital LLC and Crystal Financial LLC.

Under the five-year agreement with Capital One, first lien borrowing costs will be significantly reduced – one of a number of financial advantages for the Los Angeles-based manufacturer of fashion basics. "This financing effort will allow us to further focus our efforts in driving profitability for the benefit of all our stakeholders,” summed up Charney.

Commenting the agreement, Michael Burns, senior vice president and asset-based lending regional manager at Capital One Bank, said: "We look forward to building our relationship with American Apparel to help position the company for continued market leadership, growth and success."

“I would like to personally thank Lyndon Lea of Lion Capital for his unwavered support as a lender during the last four years, even when others doubted American Apparel's 'Made in USA' sweatshop-free mission,” stated Charney.

“Also a special thank you is due to Michael Serruya and to Andy De Francesco of Delavaco Capital, Inc. in Toronto, for their initial investment which came at a critical time in 2011, and their continued support and friendship. At American Apparel we are focused on leveraging art, design and innovation to advance our business process, rather than relentlessly pursuing off shore cheap labor. We welcome bondholders to our family of stakeholders, and re-emphasize that it is our mission to ensure that all stakeholders—customers, workers, shareholders, suppliers, and now bondholders—have a positive experience when touched by our business. We also welcome Capital One as our new bank, under our new five year agreement with them, which will greatly reduce our first lien borrowing costs. At this juncture it's time to roll up our sleeves and build American Apparel's future,” concluded the first executive of American Apparel.