Lenders holding loans to Caldor Corp., the failing discount retailer, are likely to recover their investment, say bankers familiar with bankruptcy lending.

Loans to Caldor, which announced plans Friday to close its remaining 145 stores, were secured by the retailer's inventory and real estate. The Norwalk, Conn.-based company reported assets of $1.05 billion in a third- quarter filing with the Securities and Exchange Commission.

That is good news for BankBoston Corp., which in May put together for Caldor a $450 million syndicated line of credit available through November of this year. Caldor, the nation's fourth-largest discount department store, was mired in the third year of a bankruptcy struggle and desperately seeking cash to fend off creditors.

Joining BankBoston was a group that included CIT Group, GE Capital Corp., Congress Financial Group, Finova Capital Corp., and Heller Business Credit Corp.

Last week Caldor failed to convince these lenders that its long string of losses would end. It said it would eliminate 20,000 jobs and cease operations.

When backing the company in May, the lenders argued that after a strong fourth quarter in 1997, Caldor was on the rise. It had a new five-year business plan and a target of emerging from bankruptcy protection in less than a year.

But in the ensuing months, Caldor's financial picture followed a familiar pattern, analysts say. Vendors pressured the company to pay in cash. Store shelves were void of some products. Losses mounted.

By December, Caldor reported it had not met the financial targets required by the loan agreement. Negotiations with lenders began. In early January a newspaper reported that the company had sold leases on 64 stores to competitors such as Kohls, Kmart Corp., and Target.

Then, last week, negotiations with creditors broke down. A BankBoston spokesman declined to comment. But a source familiar with the loan said lenders demanded repayment. Caldor decided to call it quits.

"Caldor didn't toe the mark," said Jerry Hirschberg, a director with Standard & Poor's corporate ratings group. "These guys got a good chance to put it back together in Chapter 11."

Mr. Hirschberg said that the demise of Caldor is a familiar story in the world of retail finance.

In the 1980s "the high cost of funds, combined with not doing so well, put pressure on the Caldors" and other regional discount retailers, he said. "The vendors put pressure on them. They created a fear in the marketplace."

Last week, Caldor said it would conduct going-out-of-business sales that will start within three weeks and end by mid-May. The company said it will also sell its stores and related real estate.

The company announced its most recent round of store closings last February, reducing its total to 145 from 157. The company said at the time that it expected to emerge from Chapter 11 protection this spring.

In its most recent federal filing, Caldor reported it was operating in nine Middle Atlantic and New England states and had annual sales of $2.4 billion. Caldor reported a net loss of $74.9 million for 1998 through Sept. 30.

The company filed for protection from creditors in September 1995 under Chapter 11 of the U.S. Bankruptcy Code.

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