Dillard's, a Little Rock, Ark.-based retailer, switched its lead bank from J.P. Morgan to Fleet Retail Finance for a new $400 million credit line. "The new credit line replaces a $750 million revolver led by J.P. Morgan," stated Julie Bull, director of investor relations for Dillard's. She declined any comment on why the switch was made.
The line was reduced substantially as Dillard's executed a $650 million accounts receivable securitization earlier this year, Bull noted. Explaining the timing for the new three-year credit, she said the old line was due to mature in May. Dillard's was originally going out for $300 million, but a heavy oversubscription meant the credit was increased by $100 million, she noted. She declined comment on the pricing of the old or new lines and the names of the other banks. Calls to officials at Fleet and J.P. Morgan were not returned.
Dillard's is coming off two record-setting consecutive quarters, with merchandise changes accompanied by belt-tightening. The company has had to adjust from competition from discount retailers and is closing underperforming stores. Last year amid difficulties the credit rating was downgraded to BBB- from BBB, while its commercial paper rating went to A-3 from A-2. Management had difficulties improving revenues at stores it acquired from Mercantile Stores was facing similar problems at the Dillard's stores, according to Standard & Poor's.