Krispy Kreme Doughnuts Inc. said it refinanced its debt in a $160 million deal that should cut the company’s interest costs.
The Winston-Salem, N.C., company announced that it has borrowed $110 million that it will use to repay a $107 million balance on its existing credit deal, plus costs associated with the transaction. In addition, the company also opened a $50 million revolving credit line.
The new debt deal was arranged by Credit Suisse.
Krispy Kreme (NYSE: KKD) said the new $110 million loan has an interest rate of LIBOR plus 3 percent; the old loan had a rate of LIBOR plus 5.875 percent, and had actually been incurring interest at LIBOR plus 7.25 percent from December 2005 through January.
LIBOR is the London Interbank Offered Rate and is widely used as a benchmark to set interest rates on debt.
The new financing was announced after the stock markets closed Friday.
