Texas – Credit modifications approved this
month by Conn’s
lenders have spared the 76-store appliance, electronics and furniture chain
from potentially defaulting on its loans.
The new agreements replaced the
leverage ratio with a covenant based on liabilities to tangible net worth, and
lowered the minimum fixed charge coverage ratio requirement for the 12-month
periods ended Jan. 31 and April 30, 2010.
However, the amendments also
increase the cost of credit for Conn’s
while reducing the amount and maturity dates of its revolving facility.
The credit line will be reduced from
$200 million to $170 million next month, and to $130 million in April 2011,
while the maturity date was shortened from September 2012 to August 2011.
The chain’s major lenders include
Bank of America, JPMorgan Chase and SunTrust.
In a statement, president/CEO Tim
Frank said, “We are very pleased that these amendments have been completed and
appreciate the support of our long-term financial partners and vendors. We look
forward to continuing to work with our financial partners on our capital needs
for the future.”
Conn’s reported a 30 percent decline in net
sales, to $171 million, for the three months ending Jan. 31. Earnings for the
quarter will be released on March 25.