Kmart's bank debt regained some ground last week, with a trade occurring at about the 40 level. The paper had sunk more than 20 points to the mid-30s two weeks ago after the company filed a motion to amend its debtor-in-possession facility, including the request for an additional $500 million of availability and relaxed covenants. The company has since sought to clarify the market's misunderstanding of its cash-burn rate and its funding needs (LMW, 8/19).
In addition, the embattled retailer announced a list of cost-cutting initiatives last week, including plans to save the company $66 million for its current fiscal year and $130 million annually. These initiatives include the elimination of low-priority projects and roughly 400 positions at its corporate headquarters. Calls to Albert Koch, cfo, were not returned by press time.