Fleming hoping to refinance credit facility and eliminate all debt due before 2007

By Sara Rosenberg

New York, May 7 - Fleming Cos. Inc. is planning to refinance its existing credit facility later this spring, according to a filing with the Securities and Exchange Commission. In addition, the company is currently changing its capital structure, with the goal of eliminating all maturities before 2007. Fleming is hoping to improve its leverage position through the debt refinancings, including reducing debt-to-EBITDA ratios.

At the end of first quarter 2002, the company's net debt was $1.89 billion, an increase of $100 million from the same period last year. The EBITDA to interest expense ratio improved to 3.02 times compared to 2.92 times at year-end and 2.63 times at the end of first quarter 2001.

"Improvement in many of these measures was particularly satisfying," said Mark Hansen, chairman of the board and chief executive officer, in Fleming's first quarter 2002 earnings release Tuesday. "We overcame the disruption created by the Kmart business interruption and still remained on-track with our goals and expectations to improve key credit and asset efficiency measures."

The Lewisville, Tex. supplier of consumer package goods to retailers originally entered into its senior secured credit facility in July 1997. The loan consists of a $600 million revolver, which matures on July 25, 2003, and a term loan, which matures on July 25, 2004. The term loan initially had a size of $250 million but through amortization payments had been reduced to $119 million at Dec. 29, 2001, according to an SEC filing. There was an outstanding balance of $200 million under the revolver and $53 million of letters of credit at Dec. 31, 2001. The company had $347 million available for borrowing under the revolver at year-end. A first priority security interest in the accounts receivable and inventories of the company and its subsidiaries and capital stock or other equity interests in its subsidiaries secure the facility.

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