Circuit City granted final approval of $1.1 billion DIP facility

By Caroline Salls

Pittsburgh, Dec. 24 - Circuit City Stores, Inc. received final court approval of its $1.1 billion of debtor-in-possession financing, according to a Tuesday filing with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the DIP revolving credit facility will supplement the company's working capital and provide additional liquidity while it works to reorganize the business. Circuit City said the financing enables the company to pay vendors and other business partners for goods and services received after the bankruptcy filing.

The DIP lenders include Bank of America NA, GE Capital Markets, Inc. and Wells Fargo Retail Finance, LLC.

The DIP facility includes a $350 million sublimit for letters of credit.

The facility will mature one year from closing or on the effective date of a plan of reorganization.

Interest will be Libor plus 400 basis points.

Circuit City, a Richmond, Va., electronics retailer, filed for bankruptcy on Nov. 10. Its Chapter 11 case number is 08-35653.

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