Talbots Closes $200 Million Credit Line
The interest only term loan has been used to pay in full the company's existing acquisition debt. Talbots also said that its board has voted to immediately suspend the company's quarterly dividend on its common stock and freeze the company's pension plans in order to further improve liquidity.
Talbots also said that it has entered into a revolving credit agreement with Bank of Tokyo-Mitsubishi to convert their existing uncommitted working capital line of $15 million to a committed line, effective immediately. As such, the company's total working capital borrowing capacity of $215 million is committed and is in addition to the new term loan facility from Aeon.
The new term loan facility will have an initial six month term extendable at Talbots option for up to five additional six month periods, effectively maturing in 2012, contains no covenants for financial ratios and will have no scheduled principal amortization.
Hingham, Massachusetts-based Talbots is a specialty retailer and direct marketer of women's apparel, shoes and accessories. The company currently operates stores in 869 locations in 47 states, the District of Columbia, and Canada, with 586 locations under the Talbots brand name and 283 locations under the J. Jill brand name.
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