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INDEBTEDNESS
3 Months Ended
Apr. 30, 2016
Debt Disclosure [Abstract]  
INDEBTEDNESS

NOTE 10: INDEBTEDNESS

 

On April 9, 2015, the Company entered into a new agreement with Regions Bank and Bank of America (the “New Agreement”) to replace the January 25, 2013 Revolving Loan and Credit Agreement that the Company had previously entered into with Regions Bank and Bank of America (the “Previous Agreement”). The proceeds from the New Agreement were used in part to refinance the Previous Agreement and to support acquisitions and the Company’s working capital needs. The New Agreement provides for a $150.0 million secured revolving line of credit, which includes a sublimit for letters of credit and swingline loans. The New Agreement matures on April 9, 2020 and bears interest at 1.25% or 1.50% plus either LIBOR or the LIBOR index rate, depending on our FIFO inventory balance. Commitment fees for the unused portion of the credit line are 20.0 basis points. The New Agreement also included an up-front credit facility fee which will be amortized over the agreement term. There were $43.1 million of borrowings outstanding and $97.9 million, net of borrowings and letters of credit, remaining available under the New Agreement at April 30, 2016. The weighted average interest rate on borrowings outstanding at April 30, 2016 was 1.69%.

 

During the second and third quarter of fiscal 2007, the Company acquired the land and buildings occupied by seven Fred's stores which we had previously leased. In consideration for the seven properties, the Company assumed debt that has fixed interest rates from 6.31% to 7.40%. On March 30, 2011, Fred’s purchased 10 properties leased from Atlantic Retail Investors, LLC, one of which has an additional parcel that is leased to an unrelated party. Six of these locations carried mortgages with fixed interest rates from 6.65% to 7.40%. Mortgages remain on two locations with a combined balance of $1.7 million outstanding at April 30, 2016. The weighted average interest rate on mortgages outstanding at April 30, 2016 was 7.40%. The debt is collateralized by the land and buildings.