Hancock Fabrics seeks $110 million credit facility via Wachovia

By Sara Rosenberg

New York, June 2 - Hancock Fabrics Inc. is working on getting a new $110 million credit facility containing a revolver and letter-of-credit facility, according to a company news release. Wachovia is the lead bank on the deal.

The new secured credit facility will be used to replace the company's existing $50 million unsecured revolver.

The new facility will have substantially less restrictive operating covenants than the existing facility and the interest rate will be only slightly higher than the current rate, the release added.

"The new credit arrangement, once completed, will provide us with a significant amount of financial flexibility as we move forward over the next few months to implement our merchandising and marketing plans. By moving to a secured credit facility that utilizes the strength of our balance sheet, we will have the necessary capital available to focus on improving our operating performance," said Jane Aggers, chief executive officer, in the release.

Hancock Fabrics is a Baldwyn, Mass., specialty retailer of fabric and related home sewing and decorating accessories.

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