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Blockbuster Raises $675 Million

2 Oct, 2009 By: Stephanie Prange

Blockbuster Inc. has closed its offering of $675 million in senior secured notes.

The issue price is 94%, and the notes are due in 2014.

The company announced it will use the proceeds to repay all indebtedness outstanding under its revolving credit facility and Term Loan B, its revolving asset-based loan facility in Canada, fund fees and expenses of the transaction, and for general corporate purposes. The letters of credit outstanding under the revolving credit facility will remain outstanding.

"The completion of the $675 million notes offering is another important milestone for Blockbuster,” said Blockbuster chairman and CEO Jim Keyes. “We are pleased with this expression of investor confidence in the sustainability of our business model. This will enable us to increase our points of presence and expand the depth and breadth of product selection and convenience across all of our channels."

The new offering, sale of Irish assets and other recent moves provide Blockbuster “with adequate liquidity and the flexibility to continue our business transformation," Keyes said.

The company also hailed an upgrade of its credit rating by Standard & Poor's Rating Service and Moody's Investor's Service’s placement of Blockbuster's credit rating on review for an upgrade.

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