Linens 'n Things granted final approval of $700 million DIP facility

By Jennifer Lanning Drey

Portland, Ore., May 28 - Linens Holding Co. received final court approval of its $700 million debtor-in-possession facility, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, General Electric Capital Corp. is the administrative agent and collateral agent.

The $700 million revolving credit facility includes a $400 million sublimit for letters of credit and a C$50 million Canadian subfacility.

The DIP facility will mature on the earliest of one year from closing, the effective date of a plan of reorganization or 30 days following plan confirmation if the effective date has not occurred.

Interest will be either revolver ABR rate/Canadian Prime margin plus 175 basis points or Libor plus 325 bps. The standby letter-of-credit margin will be 325 bps, and the commercial letter-of-credit margin will be 275 bps.

Linens will pay a 2% closing fee, a letter-of-credit fronting fee of 0.125% of the average daily amount of letter-of-credit exposure plus expenses and a $150,000 administrative agent fee.

The company said the DIP financing will ensure healthy merchandise flow as it prepares for the back-to-school and holiday selling seasons.

The DIP facility is also expected to provide adequate working capital to meet ongoing obligations during the company's restructuring.

Linens 'n Things, a Clifton, N.J., home furnishings specialty retailer, filed for bankruptcy on May 2. Its Chapter 11 case number is 08-10832.

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