Loehmann's Capital Corp. Announces Successful Consent Solicitation and Increase in Consideration Offered for Holders of its Senior Secured Notes Tendering Such Notes on or Prior to October 22, 2010

Oct 14, 2010, 11:50 ET from Loehmann's Capital Corp.

MELVILLE, N.Y., Oct. 14 /PRNewswire/ -- Loehmann's Capital Corp. ("Loehmann's") announced today that, in connection with its pending consent solicitation and 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 consents from holders representing more than fifty percent in aggregate outstanding principal amount of the old notes.  As a result, Loehmann's will now be able to achieve two of the purposes of the consent solicitation: (i) increasing the Priority Lien Cap under the Lease Agreement and the Intercreditor Agreement from $35 million to $45 million thereby allowing for a corresponding increase in the amount available under Loehmann's Operating Co.'s revolving credit facility and (ii) allowing Loehmann's Operating Co. to close up to 15 underperforming stores in the next 12 months and liquidate the inventory in those stores, as more fully described in the offering memorandum relating to the exchange offer and consent solicitation, dated September 24, 2010.

Loehmann's also announced that it is increasing the consideration offered to eligible holders that validly tender their old notes on or prior to October 22, 2010.  Accordingly, eligible holders that validly tender their old notes at or prior to 11:59 p.m., New York City time, on October 22, 2010, will receive $1,000 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange.  Eligible holders that validly tender their old notes after October 22, 2010 but at or prior to 11:59 p.m., New York City time, on October 27, 2010 will receive $970 principal amount of new notes of the same class for each $1,000 principal amount of their old notes that are accepted for exchange.

The consummation of the exchange offer will be subject to customary conditions, including the receipt of valid and unrevoked tenders of at least 97% in principal amount of the outstanding old notes.

Subject to applicable law, the company may terminate or amend, modify or waive the terms of the exchange offer and consent solicitation.

The new notes have not been and will not be registered under the Securities Act of 1933 (the "Securities Act"), as amended, or any state securities laws, may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements, and will therefore be subject to substantial restrictions on transfer.

The exchange offer and consent solicitation are only being made, and copies of the exchange offer documents will only be made available to, holders of old notes who have certified to Loehmann's in an eligibility letter as to certain matters, including their status as "qualified institutional buyers," as that term is defined under the Securities Act, "qualified purchasers," as that term is defined under the Investment Company Act of 1940 and "disqualified Non-U.S. Holders," as that term is defined in the eligibility letter (collectively, "qualified holders").  Copies of the eligibility letter are available to qualified holders through the information agent, Global Bondholder Services Corporation, Attn:  Corporate Actions, at 65 Broadway, Suite 404, New York, New York 10006, telephone number: 212-430-3774.  A supplemental confidential offering memorandum, dated today, will be distributed to qualified holders.

This press release is neither an offer to sell nor the solicitation of an offer to buy any security.  This announcement is also not a solicitation of consents to the proposed amendments to the indenture.  No recommendation is made as to whether the holders of old notes should tender their notes for exchange in the exchange offer.

SOURCE Loehmann's Capital Corp.