US: Toys R Us extends credit line

The retailer has extended its borrowing facility by $220m, in a deal with its bankers.
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The firm, acquired by KKR, Bain Capital and Vornado Realty Trust in 2005 for $7.5bn, has extended the maturity and lowered the interest margin on its credit, according to reports.

The company increased the borrowing capacity under its credit facility to $1.85bn from $1.63bn, and will initially pay an interest rate 2.75 percentage points more than the London interbank offered rate, according to the statement.

The refinancing will help improve the company’s credit profile since the 2005 leveraged buyout added debt to its balance sheet. As of May 1st, the company had long-term debt of $4.9bn.

The maturity of the new credit line will also be extended to August 2015 instead of May 2012 under the existing facility.

In May, the retailer announced that it is seeking to raise as much as $800 million in an initial public offering.

The existing credit line is part of a $2.12bn loan that was arranged by Bank of America in July 2005.

The firm also has an $804 million term loan of which $798 million is outstanding, according to data compiled by Bloomberg.


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