GameStop borrows $150M
By Staff -- Playthings, 11/19/2008 10:40:00 AM
GRAPEVINE, Texas—GameStop is borrowing $150 million from Bank of America, the video game retailer said this week in a filing with the Securities and Exchange Commission.
The company’s agreement provides for two term loans: a $50 million secured term loan and a $100 million unsecured term loan. The unsecured loan will be repaid in four equal installments of $25 million a week for four consecutive weeks, commencing on December 3, 2008. The secured loan matures on March 31, 2009.
GameStop hasn't announced the intended uses for the funds, but said proceeds from loans could go towards working capital, capital expenditures, the payment of transaction costs and a portion of the consideration in connection with its $700 million acquisition last month of French video game retailer Micromania, or for other corporate purposes.
The agreement’s terms include stipulations that amounts borrowed under the agreement may not be re-borrowed once repaid and that borrowings will bear interest at either the prime loan rate (the higher of either Bank of America's prime rate or the federal funds rate plus 0.50 percent, plus an additional 1.75 percent); or the publicly published LIBO plus 3.75 percent.
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