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Borders Receives Refinancing Commitment from GE Capital

January 27, 2011

“Borders is doing everything possible to maintain its long-term and valued relationships with our vendors and publishers, which are in the best interests of serving our combined customers. We view the refinancing route as the most practical, efficient and beneficial to all parties, and we are working with our vendors in this regard. At the same time, given the current environment surrounding Borders, and in order to assure that the company can pursue its efforts to position itself to properly implement its business plan, it is prudent as well for Borders to explore alternative avenues, including the possibility of an in-court restructuring. We are confident that whatever path Borders pursues to implement its strategy, we will be able to count upon the support of our vendors, who understand the critical role a strong Borders provides to the reading public,” commented Edwards.

The new $550 million senior secured credit facility, once funded, will mature in 2014, and will replace the company’s existing revolving senior credit and term loan facilities.

The commitment provided by GE Capital is subject to certain conditions, including:

•  The successful syndication of $175 million of the senior credit facility with other lenders, which GE Capital and the company are both working to secure;

•  $125 million of junior debt financing provided by certain vendors and other lenders;

•  The completion of supporting financing arrangements with the company’s vendors, landlords and other financing parties on terms satisfactory to GE Capital;

•  Borders’ finalization of a store closure program comprising the identification of underperforming stores that will be closed as soon as practicable;

•  GE’s completion of its business, financial and legal due diligence; the negotiation and execution of definitive financing documents; the absence of any material adverse change in the company's business or financial condition; and other customary conditions.

About Borders Group
Headquartered in Ann Arbor, MI, Borders Group is a leading specialty retailer of books as well as other educational and entertainment items. The company employs approximately 19,500 throughout the U.S., primarily in its Borders and Waldenbooks stores. Online shopping is offered through borders.com. Find author interviews and vibrant discussions of the products we and our customers are passionate about online at facebook.com/borders, twitter.com/borders and youtube.com/bordersmedia. For more information about the company, visit borders.com/media.

Source: Company press release.

 

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