The Children’s Place Enters $25M Subordinated Term Loan from Mithaq

What Happened

• The Children’s Place, Inc. announced on Sept. 24, 2026 that it received $25.0 million under a Shariah‑compliant, unsecured and subordinated promissory note (the “Fourth Mithaq Term Loan”), the second advance under a $40.0 million commitment from Mithaq Capital SPC. The loan matures April 16, 2031 and accrues interest at SOFR (1‑month) + 9.00% per annum; interest is payable monthly in cash but may be deferred by the Company upon written notice to Mithaq.
• The Company also entered conforming amendments on Sept. 24, 2026 to its Wells Fargo revolving credit agreement (Ninth Amendment), its SLR term loan agreement (First Amendment), and the Second Amended and Restated Subordination Agreement (First Amendment) to reflect the new Mithaq loan pari passu with prior Mithaq term loans.

Key Details

• Loan amount and timing: $25.0 million funded Sept. 24, 2026; remaining availability under the Mithaq commitment reduced to $0.
• Interest and maturity: SOFR (1‑month) + 9.00% p.a.; matures April 16, 2031; prepayable at any time without penalty.
• Security and priority: Unsecured, guaranteed by subsidiaries that guarantee the Company’s $350.0M Wells revolver and $100.0M SLR term loan; subordinated in payment priority to obligations under the Wells and SLR facilities per the subordination agreement.
• Related‑party: Mithaq is a controlling shareholder. Company directors Turki Saleh A. AlRajhi and Muhammad Asif Seemab hold leadership roles at Mithaq; the transaction was reviewed and approved under the Company’s related‑party policies.

Why It Matters

• Cash and liquidity: The $25M proceeds will be used to repay amounts under the Wells revolver, reduce vendor payables and for general corporate purposes—providing near‑term liquidity relief.
• Capital structure and creditor priority: The new loan increases subordinated debt exposure. Because it is unsecured and subordinated, senior lenders (Wells, SLR) maintain payment priority; investors should note potential implications for leverage and recovery priority.
• Cost and flexibility: The effective interest spread is high (SOFR + 9%), but the loan is prepayable and allows the Company to defer interest payments by notice, which may offer short‑term cash flexibility.
• Governance note: As a related‑party financing with controlling‑shareholder involvement, investors may watch for ongoing disclosures and adherence to stated conflict‑review procedures.