CALDOR CREDIT LINE IS RAISED TO RETIRE SOME DEBT EARLY
NEW YORK — Caldor Corp. will take an after-tax charge of $5.2 million, or 31 cents a share, in the first quarter of 1995 for the write-off of interest expense and other costs related to early repayment of debt.
Caldor has received commitments from its bank group for a $50 million increase in the retailer’s credit facility to $495 million and for a $100 million lease financing facility.
Proceeds will be used to pay down $59.5 million principal amount of its 15 percent senior subordinated notes to be redeemed on June 1. The transaction involves depositing money in a trust. The trustee will buy treasury bills that cover the interest and principal of the notes. Caldor will save $4.5 million in annual interest costs.
The lease facility will support growth, Caldor said. Edward Johnson, analyst at Johnson Redbook Service, said he has been expecting the charge against Caldor’s earnings, and views the debt repayment as a positive step. — Fairchild News Service