Torrid Holdings Inc.CURV
Torrid Holdings Inc. Debt Disclosure
Note 10. Debt
Our debt consists of the following (in thousands):
| January 31, 2026 | February 1, 2025 | ||||||||||
| ABL Facility (as defined below) | $ | 31,020 | $ | — | |||||||
Borrowings under credit facility(A) | $ | 31,020 | $ | — | |||||||
| Amended Term Loan Credit Agreement (as defined below) | $ | 275,625 | $ | 293,125 | |||||||
Less: unamortized original issue discount and debt financing costs | (3,217) | (4,572) | |||||||||
| 272,408 | 288,553 | ||||||||||
| Less: current portion of term loan | (16,144) | (16,144) | |||||||||
| Noncurrent debt, net | $ | 256,264 | $ | 272,409 | |||||||
(A)Outstanding borrowings under the ABL Facility are classified as current in the consolidated balance sheet based on our intent and ability to repay each respective borrowing within 12 months of the related balance sheet date.
Maturities for our noncurrent debt are as follows as of January 31, 2026 (in thousands):
| Fiscal Year Ending | |||||
| 2026 | $ | 17,500 | |||
| 2027 | 17,500 | ||||
| 2028 | 240,625 | ||||
| $ | 275,625 | ||||
Senior Secured Asset-Based Revolving Credit Facility, as amended
In May 2015, we entered into a credit agreement for a senior secured asset-based revolving credit facility with Bank of America, N.A., as administrative agent and collateral agent, and the lenders party thereto (as amended in October 2017, June 2019, September 2019, June 2021, April 2023 and August 2025, the “ABL Facility”). Under the ABL Facility the aggregate commitments available are $150.0 million (subject to a borrowing base), and we have the right to request additional commitments as described below. The August 1, 2025 amendment primarily extended the maturity date of the principal amount of the outstanding loans from June 14, 2026 to the earlier of (i) August 1, 2030 and (ii) the date that is 91 days prior to the maturity of any material indebtedness (as defined in the ABL Facility). The ABL Facility currently would mature 91 days prior to June 14, 2028, the maturity date of the Amended Term Loan Credit Agreement. There were no other material changes to the other terms of the ABL Facility. In connection with this amendment, we deferred an additional $0.4 million in financing costs.
The borrowing base for the ABL Facility at any time equals the sum of 90% of eligible credit card receivables, plus 90% of the appraised net orderly liquidation value of eligible inventory and eligible in-transit inventory multiplied by the cost of such eligible inventory and eligible in-transit inventory (to be increased to 92.5% during the period beginning on September 1 of each year and ending on December 31 of each year). The ABL Facility includes borrowing capacity for letters of credit and for borrowings on same-day notice, referred to as Swing Line Loans, and is available in U.S. dollars.
Under the ABL Facility we have the right to request up to $50.0 million of additional commitments plus the aggregate principal amount of any permanent principal reductions we may take plus the amount by which the borrowing base exceeds the aggregate commitments (subject to customary conditions precedent). The lenders under this facility are not under any obligation to provide any such additional commitments, and any increase in commitments is subject to customary conditions precedent. If we were to request any such additional commitments and the existing lenders or new lenders were to agree to provide such commitments, the size of the ABL Facility could increase to up to $200.0 million, but our ability to borrow under this facility would still be limited by the amount of the borrowing base.
Borrowings under the ABL Facility bear interest at an annual rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate of Bank of America, N.A., (2) the federal funds effective rate plus 0.50% and (3) a Secured Overnight Financing Rate (“SOFR”) for an interest period of one month adjusted for certain costs, plus 1.00%, in each case, plus an applicable margin that ranges from 0.25% to 0.75% based on average daily availability; or (b) a SOFR for the interest period relevant to such borrowing adjusted for certain costs, in each case plus an applicable margin that ranges from 1.25% to 1.75%, based on average daily availability. As of the end of fiscal years 2025 and 2024, the applicable per annum interest rate for borrowings under the ABL Facility was approximately 7% and 8%, respectively.
If we elect SOFR, interest is due and payable on the last day of each interest period, unless an interest period exceeds three months, then the respective dates that fall every three months after the beginning of the interest period shall also be interest payment dates. If we elect the base rate (including a swing line loan, as defined in the ABL Facility), interest is due and payable on the first business day of each month and on the maturity date.
In addition to paying interest on outstanding principal under the ABL Facility we are required to pay a commitment fee in respect of unutilized commitments. The commitment fee ranges between 0.25% and 0.375% per annum of unutilized commitments and will be subject to adjustment each fiscal quarter based on the amount of unutilized commitments during the immediately preceding fiscal quarter. We must also pay customary letter of credit fees and agent fees.
If at any time the aggregate amount of outstanding loans, unreimbursed letter of credit drawings and undrawn letters of credit under the ABL Facility exceeds the lesser of (a) the commitment amount and (b) the borrowing base, we will be required to repay outstanding loans and/or cash collateralize letters of credit in an aggregate amount equal to such excess, with no reduction of the commitment amount.
We may voluntarily reduce the unused portion of the commitment amount and repay outstanding loans at any time. Prepayment of the loans may be made without premium or penalty other than customary “breakage” costs with respect to SOFR loans.
All obligations under the ABL Facility are unconditionally guaranteed by substantially all of Torrid Intermediate LLC’s existing majority-owned domestic subsidiaries and will be required to be guaranteed by certain of Torrid Intermediate LLC’s future domestic majority-owned subsidiaries. All obligations under the ABL Facility and the guarantees of those obligations, will be secured, subject to certain exceptions, by substantially all of Torrid Intermediate LLC’s assets.
The ABL Facility requires us to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 when a covenant compliance event occurs. A covenant compliance event occurs if we fail to maintain specified availability (as defined by the ABL Facility) of at least the greater of 10% of the loan cap, as defined by the ABL Facility, and $7.0 million. The ABL Facility contains a number of other covenants that, among other things and subject to certain exceptions, will restrict our ability and the ability of our subsidiaries to: incur additional indebtedness; pay dividends on our capital stock or redeem, repurchase or retire our capital stock or our other indebtedness; make investments, loans and acquisitions; engage in transactions with our affiliates; sell assets, including capital stock of our subsidiaries; alter the business we conduct; consolidate or merge; and incur liens. As of the end of fiscal years 2025 and 2024, we did not trigger a covenant compliance event and were compliant with our debt covenants under the ABL Facility.
The ABL Facility specifically restricts dividends and distributions, aside from amounts to cover ordinary operating expenses and taxes, between our subsidiaries and to us. However, dividends and distributions are permitted at any time that either (1) availability under the ABL Facility is equal to or greater than 15% of the maximum borrowing amount on a pro forma basis and we are pro forma compliant with a 1.00 to 1.00 fixed charge coverage ratio or (2) availability under the ABL Facility is equal to or greater than 20% of the maximum borrowing amount on a pro forma basis. As of the end of fiscal years 2025 and 2024, the maximum restricted payments utilizing the ABL Facility that our subsidiaries could make from its net assets were $91.3 million and $102.8 million, respectively.
Availability under the ABL Facility at the end of fiscal year 2025 was $64.9 million, which reflects borrowings of $31.0 million, net of standby letters of credit issued and outstanding of $11.5 million. Availability under the ABL Facility at the end of fiscal year 2024 was $98.1 million, which reflects no borrowings, net of standby letters of credit issued and outstanding of $11.4 million.
Financing costs associated with the ABL Facility are amortized over the term of the ABL Facility. Unamortized financing costs totaling $0.1 million and $0.2 million are reflected in prepaid expenses and other current assets as of the end of fiscal years 2025 and 2024, respectively, in our consolidated balance sheets. Unamortized financing costs totaling $0.4 million and $0.1 million are reflected in deposits and other noncurrent assets as of the end of fiscal years 2025 and 2024, respectively, in our consolidated balance sheets. During each of fiscal years 2025, 2024 and 2023, we amortized financing costs of $0.2 million. During fiscal years 2025, 2024 and 2023, interest payments were $1.6 million, $0.9 million and $1.6 million, respectively. We recognize amortization of financing costs and interest payments for the ABL Facility in interest expense in our consolidated statements of comprehensive (loss) income.
Amended Term Loan Credit Agreement
On June 14, 2021, we entered into a term loan credit agreement (the “Term Loan Credit Agreement”) among Bank of America, N.A., as agent, and the lenders party thereto.
The Term Loan Credit Agreement provided for term loans in an initial aggregate amount of $350.0 million (“Principal”), net of an original issue discount (“OID”) of $3.5 million, and has a maturity date of June 14, 2028. In connection with the Term Loan Credit Agreement, we paid financing costs of approximately $6.0 million.
The $346.5 million proceeds of the Term Loan Credit Agreement, net of OID, were used to (i) repay and terminate the original term loan credit agreement; (ii) make a $131.7 million distribution to the direct and indirect holders of our equity interests; and (iii) pay for financing costs associated with the Term Loan Credit Agreement.
In May 2023, we amended the Term Loan Credit Agreement to replace the London Interbank Offered Rate (“LIBOR”) interest rate benchmark with the SOFR benchmark (as amended, the “Amended Term Loan Credit Agreement”). All other material terms of the Term Loan Credit Agreement remained substantially the same after giving effect to the Amended Term Loan Credit Agreement. The Amended Term Loan Credit Agreement did not have a material impact on our consolidated financial statements.
Loans made pursuant to the Amended Term Loan Credit Agreement bear interest at an annual rate equal to, at our option, either (a) a base rate determined by reference to the highest of (1) the prime rate quoted by The Wall Street Journal, (2) the federal funds effective rate plus 0.50% and (3) the SOFR for an interest period of one month, plus 1.00% (in each case, subject to a floor of 1.75%); or (b) the SOFR for the interest period relevant to such borrowing (subject to a floor of 0.75%), in each case plus an applicable margin of 5.50% for SOFR borrowings and 4.50% for base rate borrowings.
If we elect SOFR, interest is due and payable on the last day of each interest period, unless an interest period exceeds three months, then the respective dates that fall every three months after the beginning of the interest period shall also be interest payment dates. If we elect the base rate loan, interest is due and payable the last day of each calendar quarter. As of the end of fiscal years 2025 and 2024, the elected interest rate was approximately 9% and 10%, respectively.
Commencing with the fourth fiscal quarter of 2021, we are required to make fixed mandatory repayments representing 1.25% of the Principal on the last business day of each fiscal quarter until maturity, reduced as a result of the application of prior Prepayments (as defined below).
Under the Amended Term Loan Credit Agreement, we are also required to make variable mandatory prepayments of the Principal, under certain conditions as described below, approximately 102 days after the end of each fiscal year (each, a “Prepayment”). Prepayments, if applicable, commence at the end of fiscal year 2022 and represent between 0% and 50% (depending on our first lien net leverage ratio) of Excess Cash Flow (as defined in the Amended Term Loan Credit Agreement) in excess of $10.0 million, minus prepayments of Principal, the ABL Facility (to the extent accompanied by a permanent reduction in the commitments thereunder) and certain other specified indebtedness and amounts in connection with certain other enumerated items. As of January 31, 2026, we did not meet the Excess Cash Flow threshold to require a Prepayment.
In addition to mandatory repayment and prepayment obligations, we may at our option, prepay a portion of the outstanding Principal (“Optional Prepayment”).
All of Torrid LLC’s existing domestic subsidiaries and Torrid Intermediate LLC unconditionally guarantee all obligations under the Amended Term Loan Credit Agreement. Substantially all of the assets of Torrid LLC, Torrid LLC’s existing subsidiaries and Torrid Intermediate LLC will secure all such obligations and the guarantees of those obligations, subject to certain exceptions.
The Amended Term Loan Credit Agreement also contains a number of covenants that, among other things and subject to certain exceptions, will restrict our ability and the ability of our subsidiaries to: create, incur or assume liens on our assets or property; incur additional indebtedness; issue preferred or disqualified stock; consolidate or merge; sell assets; pay dividends or make distributions, make investments, or engage in transactions with our affiliates.
As of the end of fiscal years 2025 and 2024, we were compliant with our financial covenants under the Amended Term Loan Credit Agreement.
The OID and financing costs related to the Amended Term Loan Credit Agreement are amortized over the term of the Amended Term Loan Credit Agreement and are reflected as a direct deduction of the face amount of the term loan in our consolidated balance sheets. During fiscal year 2025, we recognized interest payments of $28.8 million and amortization of OID and financing costs of $1.4 million related to the Amended Term Loan Credit Agreement. During fiscal year 2024, we recognized interest payments of $33.2 million and amortization of OID and financing costs of $1.4 million related to the Amended Term Loan Credit Agreement. During fiscal year 2023, we recognized interest payments of $36.1 million and amortization of OID and financing costs of $1.4 million related to the Amended Term Loan Credit Agreement. We recognize interest payments, together with the amortization of OID and financing costs, related to the Amended Term Loan Credit Agreement in interest expense in our consolidated statements of comprehensive (loss) income.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 31, 2026 | Showing above |
| 2025 | Apr 1, 2025 | |
| 2024 | Apr 2, 2024 | |
| 2023 | Mar 28, 2023 | |
| 2022 | Mar 30, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.