Randy Bullard, left, and Juan Delgado/courtesy photos Randy Bullard, left, and Juan Delgado/courtesy photos

A Miami-based Greenberg Traurig duo led a legal team that secured $200 million for women’s clothing retailer Chico’s FAS Inc.

This is the first corporate financing deal Greenberg Traurig has done for the Fort Myers-based publicly traded company, whose brands are Chico’s, White House Black Market and Soma.

“This was a significant expansion of our relationship with them,” said Randy Bullard, one of the Miami shareholders who led the deal.

Bullard worked with shareholder Juan Delgado, corporate associates Stephen Pelliccia and Alexander Iparraguirre, all in Miami, as well as tax shareholder Kevin Zaragoza in New York on the deal that closed Aug. 2.

This was a U.S. asset-based credit facility secured from lead lender Wells Fargo & Co. The other lenders were Bank of America Corp. and JPMorgan Chase & Co.

The financing was leveraged against Chico’s FAS assets from U.S. stores to inventory but excluding foreign inventory, stores, intellectual property and other assets.

“An asset-based loan permits you to borrow a specific amount based upon what’s called a borrowing base,” Bullard said. “That’s a calculation based upon how much inventory you have, the value of your credit card receivables and the value of your in-transit inventory, meaning inventory that’s on the way to your warehouse.”

Issues might arise during negotiations between borrower and lender on how asset values are calculated.

“There are many different types of nuances in how those calculations are made,” Bullard said. “So the tension between the borrower and the lender is how do you calculate, obviously on the borrower’s behalf, to get as much availability as possible with the lender being comfortable that it has adequate protection and an adequate security interest in those assets. The essence of the negotiation between the parties is the calculation of this formula of borrowing base availability.”

This deal came with another challenge for the legal team — a tight timeline.

“Since they are a public reporting company, they wanted to refinance prior to the end of their fiscal quarter. And their fiscal quarter ended on Aug. 3. So it was critical to have the new financing in place by Aug. 2,” Bullard said. “It took a lot of planning, a lot of negotiations with the lender to make sure everything was done to meet that timeline.”

Chico’s FAS opted to borrow in part to refinance an existing loan on better terms, including a lower interest rate. The credit facility has an interest rate of 1.25 percent above Libor, Bullard said.

Proceeds also will help pay for day-to-day business operations, basically “whatever they decide to do,” Bullard said.

Because this was asset-backed credit, it gives the company more wiggle room when it comes to reporting to the lenders.

“There were many fewer restrictions on the operations of the company, what the company could do with their free cash flow, for example,” Bullard said. “Fewer reporting requirements that they needed to make to the bank so they had greater flexibility to operate the company without having to seek bank consent or bank approval or making various reports to the lenders. It allows them to have the flexibility to borrow funds from those lenders without having to pay a higher interest rate or report on a quarterly basis a lot of different financial metrics of the company.”

Chico’s FAS still must issue reports to its shareholders and the U.S. Securities and Exchange Commission, Bullard noted.

Greenberg Traurig has represented Chico’s FAS in matters other than corporate financing since 2013.

Chico’s FAS has 1,451 stores in the U.S. and Canada and 94 franchise locations in Mexico.

Otterbourg finance group co-chairman David Morse and attorneys David Impastato and Allen Cremer, all in New York, represented the lender.