Kellwood Co., the owner of American Recreation Products, said Thursday it has completed a crucial bond exchange that had appeared to unravel earlier this month.

The deal to exchange new senior secured notes due in 2014 for existing senior notes that matured July 15 improves s Kellwood’s financial standing, the company said. Objections this month by Deutsche Bank, Kellwood’s biggest bondholder, had threatened to derail the agreement between the company and the other bondholders to exchange $140 million in bonds.

The Wall Street Journal reported two weeks ago that Kellwood faced the possibility of bankruptcy if the exchange offer failed.

“I am very pleased that Deutsche Bank and the other bondholders accepted Kellwood’s exchange offer,” said Michael W. Kramer, President and CEO of Kellwood. “The conclusion of this transaction not only creates a better deal for our bondholders, the exchange into new notes with a maturity in 2014 strengthens our financial position. This will let us continue to build on the operational improvements we have made to date and take advantage of opportunities to grow our brands and our business.”

“In an otherwise challenging retail and fashion marketplace, Kellwood continues to perform well, with solid operations, profitability and full access to our $175 million credit facility,” added Kramer. “I want to thank our employees, customers, vendors, bondholders and Bank of America for all the support they have shown through the bond exchange process of the last few weeks. With the exchange offer completed, Kellwood is ready to move forward aggressively and reach our full potential.”

Kellwood was a publicly traded company until February 2008, when it was purchased for $542 million by Sun Capital Partners, a private equity fund based in Boca Raton, Fla. American Recreation was split out from Kellwood at the time. Although ARP reports separately and is operated separately, ARP is still legally owned by Kellwood Corp. and is not a separately-owned entity under Sun Capital.

Kellwood Co.'s brands include Vince, Baby Phat, Phat Farm, Sag Harbor, Briggs NY, Jolt, and My Michelle as well as licensed brands XOXO and David Meister. American Recreation Products' portfolio includes the Kelty, Royal Robbins, Sierra Designs, Slumberjack, and Wenzel brands.