TOWER BEATS THE CLOCK

Tower Records has apparently just beaten the clock, as we had predicted it would, and solved its cash problems. President and CEO Michael Solomon has announced that Tower has "substantially completed an amendment to its revolving credit facility."

The new agreement is being struck with Tower’s current bevy of lenders, including 11 banks led by Chase Manhattan. Prior to the amendment, Tower’s available credit was $195 million from Oct. 1 through the end of the year, dropping to $100 million in January. The new agreement ups Tower’s revolver to $205 million through the end of the year, continuing at $195 million through April of 2002.

"The strategies we implemented have positioned us to meet the challenges of a changing environment," sayeth Solomon. "However, nothing could have prepared us for the catastrophic events of September 11, and our thoughts and prayers are with all those who have been affected. Despite everything we confront currently as a nation, we continue to see consumer confidence in our segment of the market, as well as customer and community loyalty to the Tower brand. As always, we intend to serve our customers during this time with a focus on customer service and selection."

"We believe this to be a vote of confidence from our banks," adds a statement from CFO DeVaughn Searson, "which firmly demonstrates their support of Tower’s business plan and acknowledges the improvements we have made to date."

This should put an end to the unfounded speculation that Tower was on the verge of filing Chapter 11. HITS never believed that to be the case, and always thought that Tower would be able to redo its credit agreement.