Toys 'R' Us extends credit facility

By Staff -- Playthings, 6/25/2009 8:38:00 AM

WAYNE, N.J.—Toys "R" Us has lengthened by nearly two years the maturity date of its senior secured credit facility to May 21, 2012.

The borrowing capacity of the amended facility will remain at $2 billion through the original maturity date of July 21, 2010, and will continue at $1.5 billion thereafter.

In addition to the deal’s duration, the amendment revises certain terms of the credit facility to reflect current market conditions. While the borrowing capacity formula based on eligible collateral remains substantially the same, the new borrowing rates vary with usage and are approximately LIBOR plus 3.2 percent through July 21, 2010, and LIBOR plus 4.0 percent thereafter, the company said in an SEC filing made today.

"We are very pleased to have successfully extended this important borrowing facility, providing the company with ample liquidity to fund its ongoing working capital needs," said Clay Creasey, TRU’s chief financial officer. "This is a strong vote of confidence from our bank group, and serves to further strengthen the company and position it for future growth."

The credit facility is available within the retailer’s operating unit, Toys “R” Us - Delaware Inc., for general corporate purposes and the issuance of letters of credit.

Banc of America Securities and Wells Fargo Retail Finance were joint lead arrangers for the transaction, while Deutsche Bank was a joint book-running manager. Other lenders participating in the agreement included Citibank, Credit Suisse, GMAC Commercial Finance, Morgan Stanley, and UBS.

Separately, Toys "R" Us said today that wholly-owned subsidiary TRU 2005 RE Holding Co. I, LLC—soon to be renamed Toys "R" Us Property Company I, LLC—will offer $950 million in senior unsecured notes due in 2017 as part of a plan to repay a $1.3 billion senior unsecured credit agreement.

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