Chase Manhattan Corp. brought in $1 billion more in commitments than the $3.7 billion it was seeking for a loan to the struggling Kmart Corp.

With the loan in hand, the Troy, Mich.-based retailer can soon bring a $750 million convertible preferred equity issue to market.

Experts had said some of Kmart's lenders might use the new loan, which refinanced about $3 billion of debt, as an opportunity to exit the credit, instead of recommitting. A significant number of existing lenders, however, joined the three-year loan, which will provide about $700 million in liquidity.

"It's safe to say that there was some trepidation about committing to the loan," said one loan syndicator. "But it's also safe to say there was an awful lot of money in bank fees to satisfy that trepidation."

Bankers said the landmark Kmart deal could lead other struggling retailers to the bank market.

The Kmart loan was divided into a $2.5 billion revolving credit and a $1.2 billion term loan.

Howard Raab, president of Park Avenue Transglobal Financial Services Inc., Los Angeles, said the loan is contingent on completion of the convertible preferred equity offering.

"This is definitely a step in the right direction," he said.

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