Hancock Fabrics issues notes, cash in swap for $16.4 million floaters

By Susanna Moon

Chicago, Nov. 21 - Hancock Fabrics, Inc. exchanged about $16.4 million principal amount of its outstanding floating-rate series A secured notes due August 2013 for $8.2 million of new floaters due 2017 and about $8.2 million in cash.

Interest on the new notes is Libor plus 1,200 basis points, adjusted quarterly.

The exchanges were completed with noteholders on Nov. 20, according to an 8-K filing with the Securities and Exchange Commission.

After the exchange, about $5.1 million principal amount of notes remains outstanding.

The new notes and the related guarantees provided by some of the company's subsidiaries are secured by a lien on substantially all of the company's and the subsidiary guarantors' assets, but the new notes are subordinated to all of the company's existing and future senior debt, including the company's amended and restated loan agreement dated Nov. 15.

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

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