Skip to main content

Borders agrees to revised financing deal


ANN ARBOR, Mich. Borders Group reported Monday, April 7, that it has agreed to revised financing deal with Pershing Square Capital Management. The new agreement carries a lower interest rate of 9.8% on the $42.5 million senior secured term loan. The original deal called for a 12.5% interest rate.

"We are pleased to have reached a final financing agreement with Pershing Square that includes more advantageous terms and still provides Borders with the necessary funding to continue implementing our key initiatives," said Borders Group ceo George Jones. "The process of reviewing alternative financing proposals over the past two weeks was beneficial as it yielded an outcome that is better for our company and our shareholders. We are pleased to have the backing of Pershing Square, our largest shareholder, as we move forward and we appreciate their continued confidence. Borders is now turning its focus to the broader strategic alternatives process."

In addition to the lower interest rate, the revised financing agreement includes an increased backstop purchase offer of $135 million for the international subsidiaries, and a reduction in the number of warrants issued at closing to Pershing Square to 9.55 million warrants to purchase company common stock at $7.00 per share and a reduction in the term of all warrants issued to Pershing Square from 7.5 years to 6.5 years.

This ad will auto-close in 10 seconds