Kmart $2 billion revolver to be priced at Libor plus 350 basis points

By Sara Rosenberg

New York, Jan. 15 - Kmart Corp.'s $2 billion 36-month revolving exit financing facility will carry an interest rate of Libor plus 350 basis points, according to details of the loan which emerged Wednesday.

GE Capital is the administrative agent, GECC Capital Markets Group, Fleet Securities Inc. and Banc of America Securities are the co-lead arrangers and co-bookrunners, Fleet Retail Finance Inc. and Bank of America are co-syndication agents, and GE Capital and Fleet Retail Finance are co-collateral agents.

The revolver will have a letter of credit sub-facility of up to $800 million with an interest rate of Libor plus 350 basis points, according to a filing with the Securities and Exchange Commission.

A portion of the facility not to exceed $200 million may take the form of a synthetic term loan facility.

Security for the loan will be the company's inventory.

Proceeds will be used to help fund the company's working capital needs, including borrowings for seasonal increases in inventory.

The exit financing facility would replace the company's current $2 billion DIP facility on the effective date of the reorganization plan.

Kmart plans to emerge from Chapter 11 by April 30, 2003. As of Jan. 1, 2003, the Troy, Mich. discount retailer had no borrowings outstanding and had utilized $345 million of its DIP credit facility for letters of credit. Its total DIP availability as of that date was $1.56 billion.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.