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RadioShack AO Message Board

  • kens_syco kens_syco Nov 5, 2013 6:27 PM Flag

    The finacing leak is horrible for Radio Shack.....Toxic just as expected.

    RadioShack Corp. (RSH), the electronics retailer with seven straight quarterly losses, proposed rates on portions of a $835 million loan it is seeking to refinance debt.

    A $535 million asset-based revolving credit line will pay interest at 2 percentage points to 2.5 percentage points more than the London interbank offered rate, according to a person with knowledge of the deal, who asked not to be identified because the information is private. A $50 million so-called FILO loan that is repaid after the revolver will pay interest at 4 percentage points more than Libor.

    The financing for RadioShack provides it with $175 million of additional liquidity as the retailer seeks to turn itself around, according to the Fort Worth, Texas-based company’s earnings statement last month. The lending arm of General Electric Co., which is arranging the financing, isn’t marketing to investors a $250 million second-lien term loan that is part of the deal, the person said.

    Pricing on the new second-lien debt is probably more expensive than existing debt, according to Chuck Pinson-Rose, a credit analyst with Standard & Poor’s. “The company is in a stressed situation,” he said in a telephone interview.

    Maggie Thill, a RadioShack spokeswoman who works for Weber Shandwick, declined to comment on the financing. Terms of the proposed second-lien piece weren’t disclosed.

    RadioShack’s existing $100 million second-lien loan pays interest at 10 percentage points more than Libor, with a 1 percent floor on the lending benchmark, according to data compiled by Bloomberg. Its $75 million of first-lien term loans have a 4.5 percentage point spread, the data show.

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    • If you read ,the story is backing out of the cash side of the loan.

      The lending arm of General Electric Co., which is arranging the financing, isn’t marketing to investors a $250 million second-lien term loan that is part of the deal, the person said.

 
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