BRADLEES ASKS DIP CHANGE
NEW YORK — Bradlees Inc. is seeking to increase borrowings under its debtor-in-possession agreement to shore up credit support for the holiday season.
The discounter, based in Braintree, Mass., is asking Manhattan bankruptcy court to amend its $200 million DIP agreement with Chase Manhattan in order to increase available borrowings to 65 percent of inventory from 60 percent. In return, Chase will be paid $250,000.
Bradlees said the enhanced liquidity “should assuage any fears that vendors and factors may have about the liquidity of Bradlees Stores and thus enable the chain to continue to obtain favorable terms from vendors as it begins to receive inventory in anticipation of the Christmas season.”
The amendment will increase available monthly borrowings to $46.5 million from $31.9 million in October; $52.5 million from $38.8 million in November; $55.5 million from $44.3 million in December, and $35 million from $23.4 million in January.
Bradlees has been borrowing heavily, and factors are worried about getting paid if a poor holiday season forces a liquidation. As of Aug. 30, Bradlees had direct borrowings of $93.5 million under the DIP line, plus $29.3 million in trade letters of credit and $19.7 million in standby letters of credit.