Agway suspends repurchases of subordinated debentures, preferred stock

New York, June 17 - Agway Inc. said it has suspended its practice of repurchasing at face value its subordinated debentures before maturity and its preferred stock.

The DeWitt, N.Y. company noted in a filing with the Securities and Exchange Commission that it has no obligation to buy back the securities and retains the right to stop the practice at any time.

Agway said its decision was primarily intended to preserve liquidity while it sells certain operations and to give greater flexibility if the divestitures do not go as planned.

In addition, the company said it would in any case be required to stop the repurchases in the near future under the terms of its credit facility. This agreement requires Agway to maintain a maintain a minimum balance, ranging from $440 million to $450 million throughout the year, of preferred stock, subordinated debt and certain other interest-bearing debt outstanding.

As of June 14, Agway had $459 million of preferred stock, subordinated debentures and other interest-bearing debt outstanding.

Agway is not currently issuing new subordinated debentures.

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