Bloomberg News

Nebraska Book Co. Wins Approval of $200 Million Loan

July 22, 2011

(Corrects amount of unsecured notes in fifth paragraph of story published July 21.)

July 21 (Bloomberg) -- Nebraska Book Co., an operator of a nationwide chain of college bookstores, won court approval to borrow as much as $200 million to help fund operations while in bankruptcy.

U.S. Bankruptcy Judge Peter Walsh at a hearing today in Wilmington, Delaware, gave the company final permission to borrow the money, after allowing it to receive $125 million on the loan last month. A JPMorgan Chase & Co. unit is acting as the agent for lenders. The financing includes a $125 million term loan and a $75 million revolving facility.

The funds will allow Nebraska Book’s stores to acquire textbooks and other supplies they need for the fall back-to- school rush, which were historically obtained on credit from vendors, the company said in court papers.

Nebraska Book reached an agreement on a restructuring with holders of more than 95 percent of its 8.625 percent senior subordinated notes and more than 75 percent of its 11 percent discount notes. The bookseller said in a June 27 statement that it will restructure about $450 million in debt of its parent, NBC Acquisition Corp., and affiliates.

Noteholders will get control of the company under the reorganization plan Nebraska Book formally filed this week. Under the plan, $175 million in 8.625 percent senior subordinated notes would be converted into 78 percent of the new equity, $110 million in unsecured notes and a cash payment of $30.6 million. Holders of the $77 million in 11 percent discount notes would get the remaining 22 percent of the stock.

Paid in Full

Secured lenders, owed about $26.3 million, and secured noteholders, owed about $200 million, would be paid in full with cash.

The company, based in Lincoln, Nebraska, listed about $657.2 million in assets and about $564 million in debt as of Feb. 14, including the debt and assets of affiliates, in Chapter 11 documents filed June 27.

Nebraska Book currently has about 280 stores on and off campuses. It also has one of the largest wholesale distribution networks of used textbooks, supplying college bookstores with more than 105,000 different titles and selling more than 6.3 million books a year.

The case is In re Nebraska Book Co. Inc., 11-12005, U.S. Bankruptcy Court, District of Delaware (Wilmington).

--Editors: Mary Romano, Stephen Farr

To contact the reporter on this story: Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net.

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net.


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