NEW YORK, Dec. 26 /PRNewswire-FirstCall/ -- Jones Apparel Group, Inc. ("Jones") today announced that it has successfully completed an amendment to its existing $1.25 billion revolving credit facilities. J.P. Morgan Securities Inc. and Citigroup Global Markets Inc. were Joint Lead Arrangers in the amendment process. Other titled roles included JPMorgan Chase Bank, N.A. and Citibank N.A. as Syndication Agents, Wachovia Bank, National Association as Administrative Agent and Bank of America, N.A., Barclays Bank PLC and SunTrust Bank as Documentation Agents. The amendment process received broad support with substantially all banks and other financial institutions participating.
Under the amended terms and conditions, the $750 million facility maturing in May 2010 was reduced to $600 million, reflecting Jones' current business needs, and the $500 million facility that matures in June 2009 was terminated. The existing financial covenants have been adjusted to provide Jones with greater flexibility in the operation of its businesses during these unprecedented economic times. Fees and interest rates under the facility increased to current market rates, and Jones will grant certain security for borrowings under the facility. In addition, Jones will pay customary execution fees.
The credit facilities are primarily used as backing for the issuance of trade letters of credit and other supply chain purposes, but also may be used for working capital and general corporate purposes. Currently, no cash borrowings are outstanding under the existing facilities.
John T. McClain, Chief Financial Officer, stated: "We are pleased with the overwhelming support of the financial institutions associated with the amendment process and believe it was prudent to pursue amendments now that allow financial flexibility in the current uncertain economic environment. Our businesses have generated and maintained a significant amount of cash on hand, and we believe that, combined with the $600 million of committed bank credit, provides us with the financial flexibility we need to continue to pursue our multi-brand, multi-channel diversification strategy."
Jones Apparel Group, Inc. (http://www.jonesapparel.com/) is a leading designer, marketer and wholesaler of branded apparel, footwear and accessories. The Company also markets directly to consumers through its chain of specialty retail and value-based stores. The Company's nationally recognized brands include Jones New York, Nine West, Anne Klein, Gloria Vanderbilt, Kasper, Bandolino, Easy Spirit, Evan Picone, l.e.i., Energie, Enzo Angiolini, Joan & David, Mootsies Tootsies, Sam & Libby, Napier, Judith Jack, Albert Nipon and Le Suit. The Company also markets costume jewelry under the Givenchy brand licensed from Givenchy Corporation, footwear under the Dockers Women brand licensed from Levi Strauss & Co., and apparel under the Rachel Roy brand licensed from Rachel Roy IP Company, LLC. Each brand is differentiated by its own distinctive styling, pricing strategy, distribution channel and target consumer. The Company contracts for the manufacture of its products through a worldwide network of quality manufacturers. The Company has capitalized on its nationally known brand names by entering into various licenses for several of its trademarks, including Jones New York, Evan Picone, Anne Klein New York, Nine West, Gloria Vanderbilt and l.e.i., with select manufacturers of women's and men's products which the Company does not manufacture. For more than 30 years, the Company has built a reputation for excellence in product quality and value, and in operational execution.
Certain statements contained herein are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements regarding the Company's expected financial position, business and financing plans are forward-looking statements. The words "believes," "expect," "plans," "intends," "anticipates" and similar expressions identify forward-looking statements. Forward-looking statements also include representations of the Company's expectations or beliefs concerning future events that involve risks and uncertainties, including:
-- those associated with the effect of national and regional economic conditions; -- lowered levels of consumer spending resulting from a general economic downturn or lower levels of consumer confidence; -- the tightening of the credit markets and the Company's ability to obtain credit on favorable terms; -- the performance of the Company's products within the prevailing retail environment; -- customer acceptance of both new designs and newly-introduced product lines; -- the Company's reliance on a few department store groups for large portions of the Company's business; -- consolidation of the Company's retail customers; -- financial difficulties encountered by customers; -- the effects of vigorous competition in the markets in which the Company operates; -- the Company's ability to attract and retain qualified executives and other key personnel; -- the Company's reliance on independent foreign manufacturers; -- changes in the costs of raw materials, labor, advertising and transportation; -- the general inability to obtain higher wholesale prices for the Company's products that the Company has experienced for many years; -- the uncertainties of sourcing associated with an environment in which general quota has expired on apparel products; -- the Company's ability to successfully implement new operational and financial computer systems; and -- the Company's ability to secure and protect trademarks and other intellectual property rights.
A further description of these risks and uncertainties and other important factors that could cause actual results to differ materially from the Company's expectations can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2007, including, but not limited to, the Statement Regarding Forward-Looking Disclosure and Item 1A -- Risk Factors therein, and in the Company's other filings with the Securities and Exchange Commission. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such expectations may prove to be incorrect. The Company does not undertake to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
