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By Dhanya Skariachan
BANGALORE, April 21 (Reuters) - Coldwater Creek Inc CWTR.O amended its $60-million five-year revolving credit facility with Wells Fargo Bank, allowing the women's apparel retailer to pay a smaller fixed quarterly charge for the rest of fiscal 2008.
The news of the amendment comes even as the retailer's top rival Talbots Inc TLB.N disclosed last week that two of its lenders, HSBC (HSBA.L) and Bank of America (BAC.N), would no longer make letters of credit available to the company.
"In light of the news from Talbots last week, this release should provide confidence in the financial condition of Coldwater Creek," CL King analyst Mark Montagna said in an e-mail to Reuters.
Coldwater Creek, which caters to mature women along with peers Chico's FAS Inc (CHS.N) and Talbots, has been struggling due to sluggish retail trends and lackluster fashions that have translated into fewer sales at its stores.
As per the amendment, Coldwater Creek will not repurchase any of its stock prior to May 2, 2009, and will maintain liquidity of at least $30 million through April 2009.
"We view it as a positive that the company is not allowed to repurchase stock until May 2, 2009," CL King's Montagna said, adding that the move will help in alleviating investor concerns related to the retailer's financial condition.
Over the next year, there is no chance of burning through cash to repurchase the remaining $50 million of the original $75 million authorization, Montagna wrote.
Montagna has an "accumulate" rating and a price target of $8 on the apparel retailer's stock.
Coldwater Creek said the amendment to its credit agreement with Wells Fargo does not change the amount available under the facility or the term of the agreement.
The retailer added that its cash on hand and working capital, along with cash flow from operations, would be sufficient to fund operations and capital expenditures in fiscal 2008.
At the end of fiscal 2007, the Sandpoint Idaho-based company had $62.5 million in cash, $115.8 million in working capital and no borrowings under its bank facility.
Coldwater Creek shares, which have lost more than three quarters of their value over the past 12 months, were up more than 1 percent at $4.87 in midday trade on Nasdaq. They touched a high of $5.05 earlier in the session. (Editing by Anil D'Silva, Himani Sarkar)