NORWALK, Conn. - Chemical Banking Corp. has provided a $250 million loan to the Caldor Corp. to help the retailer to meet its obligations during bankruptcy reorganization.

The debtor-in-possession financing will enable the Caldor to meet future inventory needs and to fulfill obligations associated with operating its business, including the prompt payment of new vendor invoices.

Caldor filed for reorganization under Chapter 11 of the bankruptcy law with $1.2 billion of assets and $883 million in liabilities. Caldor said it was in compliance with its bank loan covenants, but that some vendors had "reduced support" for the chain of 166 discount stores, which faces heavy competition and reduced sales.

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