Talbots amends credit facility to repay bank loans
Hingham, Mass. Talbots said Monday it has amended its secured revolving loan agreement with shareholder Aeon Co. to repay all of its outstanding third-party bank debt.
The amendment is part of a larger plan for Talbots to merge with holding company BPW Acquisition Corp.
The amended loan agreement will mature on either April 16, 2010, or at the closing of a deal with BPW, whichever happens first. That deal was announced in December.
Aeon is a Japanese operator of malls, supermarkets, convenience stores and department stores. Talbots said Aeon is the company's majority shareholder.
The principal amount of Talbots' secured credit facility with Aeon was increased to $250 million from $150 million. Talbots also said it drew $245 million from its amended facility on Dec. 29 to pay off debt, which was about $241 million in principal as well as related fees and expenses.
Under the amendment for the credit facility, interest on the outstanding principal is one-month Libor plus 600 basis points. The facility is secured by the company's assets, including inventory and mortgages on its headquarters and a distribution facility.