Penn Traffic Extends Credit Agreements

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Penn Traffic Extends Credit Agreements

04/01/2008
The Penn Traffic Co. has extended its existing credit agreements, which would have expired April 13.

The regional grocer's credit agreement with GE Corporate Lending, serving as agent in a facility also including The CIT Group/Business Credit, Inc.; Bank of America, N.A.; and Wachovia Capital Finance Corp., now expires April 13, 2010. A credit agreement with Kimco Capital Corp. was extended until April 13, 2009 but Penn Traffic can extend that agreement until April 13, 2010, subject to satisfying certain financial ratios and certain other conditions.

The existing agreements provide for $162 million of available credit, including a $130 million revolving line of credit, a $6 million term loan, and a $26 million supplemental real estate facility.

"The successful extension of our credit agreements provides Penn Traffic with the necessary flexibility to continue to stabilize the business, invest in our core retail store portfolio, improve our customers' shopping experience, and improve our overall offering in the markets we serve," noted Gregory J. Young, president and c.e.o. of the Syracuse, N.Y.-based retailer.

In relation to the extension and related amendments to the credit agreements, Penn Traffic agreed to pay $953,200 in fees to its lending partners. To extend the credit agreement with Kimco to April 13, 2010, the grocer will have to pay Kimco an additional extension fee based on its outstanding borrowings as of April 13, 2009.

Penn Traffic operates 98 supermarkets in Pennsylvania, upstate New York, Vermont, and New Hampshire under the BiLo, P&C, and Quality banners. The retailer also operates a wholesale food distribution business serving about 130 independent operators.