Blockbuster has received commitments to refinance its revolver that had a looming September 2009 maturity, but it did so at a high cost. The facility, led by JPMorgan, was downsized to $250 million from $350 million.
The deal was completed with pricing at LIBOR plus 10% and added a floor at 3%. It also includes a series of bells and whistles aimed at discouraging the Dallas-based video rental company from drawing on the facility. The credit had been priced at LIBOR plus 3 1/2%. The new provisions include a fee to be paid in April 2010, if more than $75 million is drawn, of the lesser amount of $5 million or 10% of the drawn amount. Additionally, if the revolver is fully drawn, the company must make amortization payments in each of the first six months of 2010 to pay the facility down.
The facility will mature in September 2010. A Blockbuster spokeswoman could not immediately comment. Blockbuster is one of more than 50 companies facing loan maturities this year that may meet refinancing roadblocks given tight credit markets (CIN, 2/14).