Phoenix Footwear Group, Inc. has entered into a new two year, secured revolving credit facility with First Community Financial, a division of Pacific Western Bank. The facility replaces the company's previous credit facility with Wells Fargo Business Credit. The new credit facility provides for a line of credit up to $4.5 million, subject to a borrowing base limit, and as of December 4, 2009, has $2.0 million in borrowings, net of cash, outstanding under the new facility.
Borrowings under the new credit facility bear interest at an annual rate of prime plus 2.75%, subject to a minimum of 6%. Additionally, the there is a minimum monthly interest charge of $10,000 for the first year of the facility and $5,000 for the following year. The new credit facility is secured by liens on certain personal property of the Company and its subsidiaries.
“We are pleased to be able to announce our new credit facility. While this has been a lengthy process, it has resulted in a significant increase in capacity, a more competitive cost of funds and a multi-year commitment giving us working capital strength and flexibility to support our efforts to grow our brands”, said Rusty Hall, Phoenix Footwear's Chief Executive Officer. “We finish the year having accomplished our critical initiatives including; rightsizing the organization, divesting or exiting two lines of business and recapitalizing our balance sheet. We have also gained momentum of late with a substantial increase in our future orders and number of new retail partners. We are working to translate this into a return to sustained, profitable growth.”