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CINCINNATI-Federated Department Stores Inc. is terminating the $5-billion bridge financing facility it used for the acquisition of the May Department Stores Co. in August of last year. The facility, which was issued with a syndicate of four banks, was stated to mature on one year from the date of acquisition.
As planned, the company has resumed its share repurchase program. At the end of the first quarter of 2006, Federated had outstanding authorization to repurchase up to $670 million of its shares in the open market.
Terry J. Lundgren, Federated's chairman, president and chief executive officer, says the decision to terminate the loan early illustrates the company's confidence in the progress of the merger. "Our prospects for upcoming asset sales in 2006 are on schedule and we continue to expect strong cash flow from operations in the future," he said in a released statement.
Prior to completion of initial sales of assets and credit receivables, company documents show the facility had been reduced to $1.29 billion. Federated's working capital facility of $2 billion, which expires in 2010, remains in place and available for use.
Federated operates more than 850 department stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the names of Macy's, Bloomingdale's, Famous-Barr, Filene's, Foley's, Hecht's, Kaufmann's, L.S. Ayres, Marshall Field's, Meier & Frank, Robinsons-May, Strawbridge's, the Jones Store.
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