KB Toys to get $175 million exit facility from Bank of America

By Sara Rosenberg

New York, May 17 - KB Toys Inc. has received a commitment for a $175 million three-year exit financing credit facility from Bank of America, according to documents filed with the U.S. Bankruptcy Court for the District of Delaware Friday.

The facility consists of an up to $150 million senior secured revolving credit facility with an interest rate of Libor plus 162.5 basis points to Libor plus 237.5 basis points and an up to $25 million senior secured term loan with an interest rate of Libor plus 437.5 basis points.

Proceeds will be used to refinance existing debtor-in-possession facilities and to finance working capital needs and for general corporate purposes of the reorganized company.

KB, a Pittsfield, Mass., toy retailer, filed for Chapter 11 on Jan. 14, 2004. The company expects to emerge from Chapter 11 before the 2005 holiday season.

The company's Chapter 11 case number is 04-10120.

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