BARRY’S IN PACT TO SECURITIZE ITS RECEIVABLES
NEW YORK — With an eye toward lowering its borrowing costs, Barry’s Jewelers Inc. has entered into an agreement with Capital Markets Assurance Corp. to securitize its accounts receivable.
Under the program, up to $80 million of financing will be available to Barry’s Funding Corp., a wholly owned special-purpose subsidiary of the company. The securitization, together with a new $20 million revolving credit commitment with Bank of Boston, will provide the Monrovia, Calif.-based jewelry retailer with expanded credit facilities of up to $100 million. Proceeds of the initial funding were used to repay at par $20 million of Barry’s $70 million in 11 percent 7-year notes and a portion of the outstanding balance of its existing line of revolving credit.
“Through the transaction, Barry’s will be able to make far better use of its assets, significantly lower its interest burden and gain the means to more vigorously pursue its growth strategies, whether through internal expansion or acquisition,” Thomas S. Liston, interim president and chief executive officer, said in a statement.
The transaction has been rated AAA by Standard & Poor’s and Moody’s Investor Service. Barry’s currently operates 161 stores.