Pep Boys Completes Term Loan Financing; Reduces Interest Rate on Existing Facility
October 30 2006 - 4:31PM
Business Wire
The Pep Boys � Manny, Moe & Jack (NYSE:PBY), the nation�s
leading automotive aftermarket retail and service chain, announced
that it closed on a $120 million expansion of its senior secured
term loan facility syndicated by Wachovia Capital Markets, LLC. The
facility was amended and restated to (i) increase the size from
$200,000,000 to $320,000,000, (ii) extend the maturity from January
27, 2011 to October 27, 2013, (iii) reduce the interest rate from
London Interbank Offered Rate (LIBOR) plus 3.00% to LIBOR plus
2.75% (with the ability to further reduce the interest rate to
LIBOR plus 2.50%, upon achieving a specified leverage ratio). An
additional 87 stores (bringing the total to 241 stores) were added
to the collateral pool securing the facility. Proceeds were used to
satisfy and discharge $119 million in outstanding convertible notes
that mature June 1, 2007. Such notes, however, do remain
convertible into shares of the Company�s common stock, at
approximately $22.40 per share, through maturity. The Company
expects (i) to record, in the third quarter, approximately $3.5
million dollars in costs associated with such satisfaction and
discharge and (ii) to earn, in future periods through the notes�
maturity date, an approximately equivalent amount of interest on
the funds placed into escrow to effectuate such satisfaction and
discharge. CFO Harry Yanowitz said, �We are very pleased with the
support we received from our current lenders in expanding this
facility. This final piece of a three-year program of extending our
debt maturity schedule now leaves the Company with no significant
funded debt maturities until 2013, allowing Pep Boys to focus its
energies squarely on operating improvements.� About Pep Boys Pep
Boys has 593 stores and more than 6,000 service bays in 36 states
and Puerto Rico. Along with its vehicle repair and maintenance
capabilities, the Company also serves the commercial auto parts
delivery market and is one of the leading sellers of replacement
tires in the United States. Customers can find the nearest location
by calling 1-800-PEP-BOYS or by visiting pepboys.com. Certain
statements contained herein constitute "forward-looking statements"
within the meaning of The Private Securities Litigation Reform Act
of 1995. The word "guidance," "expect," "anticipate," "estimates,"
"forecasts" and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements include
management's expectations regarding future financial performance,
automotive aftermarket trends, levels of competition, business
development activities, future capital expenditures, financing
sources and availability and the effects of regulation and
litigation. Although the Company believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its
expectations will be achieved. The Company's actual results may
differ materially from the results discussed in the forward-looking
statements due to factors beyond the control of the Company,
including the strength of the national and regional economies,
retail and commercial consumers' ability to spend, the health of
the various sectors of the automotive aftermarket, the weather in
geographical regions with a high concentration of the Company's
stores, competitive pricing, the location and number of
competitors' stores, product and labor costs and the additional
factors described in the Company's filings with the SEC. The
Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events. The Pep Boys - Manny, Moe & Jack (NYSE:PBY), the
nation's leading automotive aftermarket retail and service chain,
announced that it closed on a $120 million expansion of its senior
secured term loan facility syndicated by Wachovia Capital Markets,
LLC. The facility was amended and restated to (i) increase the size
from $200,000,000 to $320,000,000, (ii) extend the maturity from
January 27, 2011 to October 27, 2013, (iii) reduce the interest
rate from London Interbank Offered Rate (LIBOR) plus 3.00% to LIBOR
plus 2.75% (with the ability to further reduce the interest rate to
LIBOR plus 2.50%, upon achieving a specified leverage ratio). An
additional 87 stores (bringing the total to 241 stores) were added
to the collateral pool securing the facility. Proceeds were used to
satisfy and discharge $119 million in outstanding convertible notes
that mature June 1, 2007. Such notes, however, do remain
convertible into shares of the Company's common stock, at
approximately $22.40 per share, through maturity. The Company
expects (i) to record, in the third quarter, approximately $3.5
million dollars in costs associated with such satisfaction and
discharge and (ii) to earn, in future periods through the notes'
maturity date, an approximately equivalent amount of interest on
the funds placed into escrow to effectuate such satisfaction and
discharge. CFO Harry Yanowitz said, "We are very pleased with the
support we received from our current lenders in expanding this
facility. This final piece of a three-year program of extending our
debt maturity schedule now leaves the Company with no significant
funded debt maturities until 2013, allowing Pep Boys to focus its
energies squarely on operating improvements." About Pep Boys Pep
Boys has 593 stores and more than 6,000 service bays in 36 states
and Puerto Rico. Along with its vehicle repair and maintenance
capabilities, the Company also serves the commercial auto parts
delivery market and is one of the leading sellers of replacement
tires in the United States. Customers can find the nearest location
by calling 1-800-PEP-BOYS or by visiting pepboys.com. Certain
statements contained herein constitute "forward-looking statements"
within the meaning of The Private Securities Litigation Reform Act
of 1995. The word "guidance," "expect," "anticipate," "estimates,"
"forecasts" and similar expressions are intended to identify such
forward-looking statements. Forward-looking statements include
management's expectations regarding future financial performance,
automotive aftermarket trends, levels of competition, business
development activities, future capital expenditures, financing
sources and availability and the effects of regulation and
litigation. Although the Company believes that the expectations
reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its
expectations will be achieved. The Company's actual results may
differ materially from the results discussed in the forward-looking
statements due to factors beyond the control of the Company,
including the strength of the national and regional economies,
retail and commercial consumers' ability to spend, the health of
the various sectors of the automotive aftermarket, the weather in
geographical regions with a high concentration of the Company's
stores, competitive pricing, the location and number of
competitors' stores, product and labor costs and the additional
factors described in the Company's filings with the SEC. The
Company assumes no obligation to update or supplement
forward-looking statements that become untrue because of subsequent
events.
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