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Quaker Fabric refinancing deal gets preliminary 'go ahead'

18 Oct '06

2 min read

Quaker Fabric Corporation announced that it had reached preliminary agreement with Bank of America, N.A., as Agent, and GB Merchant Partners, LLC on the terms of a refinancing transaction that would provide the Company with approximately $50.0 million of senior secured financing going forward.

Pursuant to the terms of this preliminary agreement, the Company's current senior secured credit facility with Bank of America would be amended to provide Quaker with a $25.0 million revolving credit facility going forward, secured by all of the Company's assets other than Quaker's real estate and machinery and equipment.

Consummation of this transaction would also result in the repayment, in full, of Quaker's obligations under the term loan portion of its existing senior secured credit facility with the Bank.

The deal with GB Merchant Partners would provide Quaker with two (2) senior secured term loans of up to $12.5 million each, one secured by Quaker's real estate and the other secured by the Company's machinery and equipment. Both the Bank and GB transactions would run through May 17, 2010.

"This represents an important milestone in our efforts to put new financing arrangements in place consistent with Quaker's strategic objectives and current operating and working capital needs. We look forward to working with Bank of America and Gordon Brothers to bring this financing to a successful conclusion as quickly as the required approval, due diligence and documentation processes permit," commented Larry A. Liebenow, Quaker's President and CEO.

Quaker Fabric Corporation

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