Fitch boosts outlook on Bon-Ton Stores

AP News
Posted: Nov 20, 2009 1:12 PM

Fitch Ratings raised its outlook for Bon-Ton Stores Inc. on Friday from "Negative" to "Stable," citing the department store operator's reworked credit agreement.

The amended facility and a new term loan also prompted Moody's Investors Service to put the company's long-term ratings under review for a possible upgrade. Moody's said it will review the closing of the new credit agreement as well as how much Bon-Ton's liquidity improves.

It has a "Caa2" corporate family rating on the York, Pa., company.

Meanwhile Fitch maintained the department store operator's "B-," or junk, issuer default rating.

The ratings agency said the credit line, which was also extended, gets rid of liquidity concerns surrounding the company.

Bon-Ton, which runs stores under names including Bergner's, Boston Store, Herberger's and Younkers, said Wednesday that it agreed with lenders to take a $675 million 3.5-year senior secured asset-based credit line to replace its existing $800 million revolving credit facility set to mature in March 2011.

The company also closed on a $75 million second-lien term loan, which matures on Nov. 18, 2013.

Shares of Bon-Ton added 22 cents to $12.88 in afternoon trading. The stock hit a new 52-week high of $13.22 earlier in the session.