GE Commercial Finance Corporate Lending said Tuesday that it provided a five-year, $300 million asset-based credit facility to department store retailer Lord & Taylor to be used for working capital needs and other general purposes.
The agreement reflects a change in financing toward better interest rates while also revealing that there are willing lenders in the credit market, which tightened up following the collapse of the subprime mortgage sector. Last week, Hampshire Group Ltd. secured a similar loan from HSBC.
Michael Culhane, executive vice president and chief financial officer for Lord & Taylor, said, "GE provided the entire credit facility, offering more favorable terms than available under the existing bank group arrangements.
"The GE team demonstrated a true understanding of the challenges and opportunities upscale specialty store retailers are facing," Culhane added.
GE has a history of working with Lord & Taylor, whose parent corporation is NRDC Equity Partners Ltd. GE Money also provides the retailer with its private label credit cards.
Jim Hogan, managing director of GE Corporate Lending's retail group said, "We have an in-depth understanding of the retail industry — the market, the issues and the opportunities. When we consider a company like Lord & Taylor for financing, we look at many factors such as their validity in the marketplace, vision, strength of the management team and strong reporting and financial controls."
Hogan said whether a company experiences "ups or downs, we're focused on the long term. Like Lord & Taylor, if companies meet rigorous risk criteria such as these, we'll provide the financing to help support their business needs."
Last week apparel maker Hampshire Group Ltd. said that it received a five-year, $125 million senior secured revolving credit facility from a lending group led by HSBC. The facility replaces a $100 million credit line that was soon to expire.
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