MTS receives commitment for $125 million credit facility

By Sara Rosenberg

New York, June 14 - MTS Inc. received a commitment letter from CIT Group/Business Credit Inc. for $125 million to refinance a portion of its existing credit facility, according to a filing with the Securities and Exchange Commission. In addition, the company is currently involved in negotiations to extend the maturity of its credit facility beyond June 23.

In April, MTS amended its credit facility to extend the maturity by 60 days to June 23 and amend certain financial covenants, the filing said. JPMorgan Chase Bank acted as administrative agent for the deal.

The company's extension requests are to accommodate the completion of the sale of its Japanese operations to Nikko Principal Investments Japan Ltd., for ¥16 billion, or approximately $124 million, according to the SEC filing. The stock purchase agreement will be terminated if the transaction does not close before Aug. 15.

Net proceeds from the equity sale will be used "to pay down a significant portion" of the existing bank loan, the filing said. The remainder of the loan will be refinanced with proceeds from the new credit facility. The company is also negotiating supplemental financing to refinance any remaining balance on the bank loan, if the stock sale and new line of credit are not enough, the filing said.

MTS is a West Sacramento, Calif. specialty retailer of music.

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