RadioShack enters into $450 million five-year asset-based revolver

By Jennifer Chiou

New York, Jan. 7 - RadioShack Corp. entered into a new $450 million asset-based revolving credit agreement on Tuesday with Bank of America, NA as the administrative agent and collateral agent, according to an 8-K filing with the Securities and Exchange Commission.

The new revolver replaces the company's existing $325 million unsecured revolving credit facility with Citibank, NA as administrative agent and paying agent.

The agreement provides an option to increase total commitments to $650 million, the 8-K said.

Obligations under the loan are secured by first-priority liens on substantially all of the company's inventory, accounts receivable, deposit accounts, cash and cash equivalents, and certain other personal property.

Up to $150 million will be available for letters of credit, and a maximum of $50 million may be used for swingline loans.

The revolver is set to mature on Jan. 4, 2016.

Borrowings will accrue interest at Libor plus 225 basis points when average daily availability is greater than two-thirds, at Libor plus 250 bps when availability stands at between one-third and two-thirds, and at Libor plus 275 bps when availability is under one-third.

There is also an unused commitment fee of 50 bps.

Also, the company will be required to maintain a minimum consolidated fixed-charge coverage ratio of 1 to 1 when availability under the ABL is less than the greater of 12.5% of the maximum borrowing amount and $45 million.

RadioShack is a Fort Worth, Texas-based retail seller of consumer electronic goods and services.

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