The Bon-Ton Stores, Inc. announced that, effective as of January 15, 2016, it has retired its remaining mortgage loan facility due in April using borrowings under the Company’s $830 million revolving credit facility. The mortgage loan facility had principal outstanding of $102.4 million and was secured by 12 properties. In June of 2015, the Company retired the first of its two mortgage loan facilities in the amount of $104.5 million. The consummation of these two transactions fully satisfies all obligations pursuant to the Company’s aggregate mortgage loan facility entered into on March 6, 2006.
To facilitate the transaction, the Company’s revolving credit facility was amended to include the special purpose entities (“SPEs”) that had previously participated in the Company’s two mortgage loan facilities. Pursuant to the amendment, all 18 properties owned by the SPEs became real estate in which security interests were granted under the revolving credit facility. As a result, the borrowing base availability under the revolving credit facility increased to reflect the addition of the properties.
Kathryn Bufano, President and Chief Executive Officer, commented, “We were able to retire our remaining mortgage facility through our recent proactive pursuit of increased borrowing capacity under our revolving credit facility. That increased capacity and the granting of security interests in the 18 owned properties afforded us the flexibility to utilize our revolver for retirement of the mortgage facility while maintaining sufficient liquidity to effectively manage our business and fund strategic initiatives to position us for long-term profitable growth.”
In conjunction with the early termination of the mortgage loan facility, the Company will pay $1.3 million to satisfy the make-whole provision of the agreement.
The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 270 stores, which includes nine furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.