Casual apparel maker Tarrant Apparel Group issued $10 million of convertible debentures to finance the development of its private brands and manage increased sales volume in the coming year.

The debentures, which carry a 6 percent coupon, can be converted into common stock at a price of $2 per share within the next three years. Buyers also received warrants on up to 1.25 million Tarrant shares, at an exercise price of $2.50 each over five years.

Los Angeles-based Tarrant, which has a market capitalization of $57.3 million, had about 28.8 million shares outstanding as of Nov. 12. Its stock closed at $1.99 a share on Monday.

Tarrant lost $78.5 million in the first nine months of this year, compared with a loss of $43.3 million in the like year-ago period. Revenues have fallen to $118.8 million from $253.4 million over the same periods.