Blockbuster in deal with Viacom to cut value of letters of credit

Dallas In a step aimed at improving liquidity, video-rental company Blockbuster said Wednesday it has reached a deal with former parent company Viacom to cut the face value of letters of credit it holds on Viacom's behalf to $25 million from $75 million.

The letters of credit cover potential liabilities for Viacom under store leases that began before Blockbuster was spun off in 1999. Blockbuster said Wednesday that many of those leases have been renegotiated without relying on Viacom credit, reducing the New York media conglomerate's commitments.