Loehmann's Capital Corp. Announces That Exchange Offer Will Not Be Consummated

MELVILLE, N.Y., Oct. 29 /PRNewswire/ -- Loehmann's Capital Corp. ("Loehmann's") announced today that, in connection with its private offer to exchange its outstanding 12% Senior Secured Class A Notes due 2011, Senior Secured Class A Floating Rate Notes due 2011 and 13% Senior Secured Class B Notes due 2011 (collectively, the "old notes") for 12% Senior Secured Class A Notes due 2014, Senior Secured Class A Floating Rate Notes due 2014 and 13% Senior Secured Class B Notes due 2014 (collectively, the "new notes"), it has received valid tenders representing 92.4% in aggregate outstanding principal amount of the old notes.  The consummation of the exchange offer was conditioned upon the receipt of valid and unrevoked tenders of at least 97% in principal amount of the outstanding old notes.  As a result, the exchange offer will not be consummated.  

In light of the foregoing, Loehmann's will not make the October interest payment under the old notes prior to the expiration of the 30-day grace period.  The failure to make the interest payment will result in defaults under the indenture governing the old notes and Loehmann's Operating Co.'s revolving credit agreement with Crystal Financial LLC ("Crystal").  

Loehmann's is continuing its discussions with certain significant holders of the old notes and Crystal regarding forbearance agreements and is exploring all of its alternatives, including a possible pre-negotiated reorganization proceeding.  While this dialogue has been generally constructive to date, there can be no assurance that these negotiations will be successful.

SOURCE Loehmann's Capital Corp.