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KB Toys $25 million seasonal overadvance facility approved
By Caroline Salls
Pittsburgh, July 27 - KB Toys Inc. obtained approval for access to an up to $25 million revolving overadvance credit facility under its $175 million exit financing from Bank of America, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.
The financing will be used to provide the reorganized company with liquidity to finance seasonal inventory purchases.
The overadvance facility can be used in increments of at least $5 million.
Maturity is three years from the closing date.
Interest will be 12%, payable monthly, plus 3% in the event of default.
If the facility is terminated for any reason other than default, KB Toys will be required to pay the lenders' expenses, up to $700,000.
KB Toys, a Pittsfield, Mass., toy retailer, filed for Chapter 11 on Jan. 14, 2004. The company expects to emerge from bankruptcy before the 2005 holiday season.
The company's Chapter 11 case number is 04-10120.
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