Fleet Retail Finance, the asset-based lending unit of Fleet Boston Financial, is seeking commitments to fill a $365 million credit facility for Hudson, Ohio-based Jo-Ann Stores, Inc. Don Tomoff, v.p. finance for Jo-Ann, noted that the facility was launched on April 25 and syndication is expected to close within the next two weeks. Some commitments are already in, he noted, declining to provide figures or name other banks involved.
The new credit replaces a $300 million unsecured revolver signed in May 1999 that had $147 million outstanding. Officials at Fleet Retail did not return calls.
The new secured facility, which matures in April 2005, provides Jo-Ann with enhanced financial liquidity and better pricing, Tomoff stated. Consisting of a $325 million credit revolver and a $40 million term loan, pricing is LIBOR plus 13/ 4% to 2 1/4 % based on the amount drawn down, with a minimum of LIBOR plus 2% for the first year. The credit does not contain any covenant tests as long as excess availability is greater than $35 million. The deal is secured against the inventory and receivables of the company. "Following negotiations with current bank groups, Fleet impressed with pricing and the overall package," said Tomoff. Key Bank and BANK ONE were the mandated arrangers on the previous loan.