Pep Boys $200 million term loan to launch in January

By Sara Rosenberg

New York, Dec. 16 - The Pep Boys - Manny, Moe & Jack plan to hold a bank meeting in the first or second week of January to launch its proposed $200 million senior secured term loan, a company spokesman told Prospect News Friday.

Wachovia is the lead bank on the deal.

Proceeds from the term loan will be used to repay $43 million and $100 million in outstanding medium term notes that mature in 2006 and reduce borrowings under the company's revolver.

The term loan is expected to be completed in January or February.

"Pre-financing our 2006 maturities will ensure that the company can execute on our strategy to optimize our retail and service operations and, in turn, improve long-term shareholder value. In addition, the new facility's prepayment and collateral substitution rights will allow the company to continue the process of improving capital allocation, ensuring that each of its properties can be developed to its highest and best use," said Harry Yanowitz, chief financial officer, in the release.

Pep Boys is a Philadelphia-based automotive aftermarket retail and service chain.

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