Blockbuster Inc. Shares Jump 10% (BBI)

Blockbuster Inc. (NYSE:BBI) shares are up 10% today and are finally back above 80 cents a share thanks to the company eliminating the final $24 million of certain letters.

Blockbuster shares are now up 11% in the last 30 days, here's the news on today's liquidity improvement.

DALLAS, Jan. 14 /PRNewswire-FirstCall/ -- As part of its ongoing liquidity improvement initiatives, Blockbuster Inc. (NYSE: BBI) (NYSE: BBI.B) today announced that it has eliminated the final $24 million of certain letters of credit it maintained on behalf of its former parent company, Viacom Inc.

"Eliminating this final $24 million of credit exposure frees up cash and helps our liquidity," said Chief Financial Officer Tom Casey. "Not only were we able to eliminate the previous $51 million of letter of credit exposure with Viacom in 2009, we also raised $675 million on our bond offering to extend our debt maturities into 2014. While 2009 was a challenging year in the overall macroeconomic environment, what we were able to accomplish in such a credit strapped market last year was truly remarkable."

The letters of credit were maintained by Blockbuster for Viacom's benefit to cover Viacom's potential liability under certain BLOCKBUSTER® store leases pursuant to arrangements made in connection with Blockbuster's split off from Viacom in 2004. Pursuant to that arrangement, the obligation to maintain a letter of credit expires when Viacom's overall exposure (as determined on an agreed basis) is below $25 million. As a result of normal reduction of remaining lease term and targeted Blockbuster efforts, that exposure is now below the $25 million threshold. Additional details on the agreements with Viacom that facilitate the cancellation of the letters of credit are outlined in a Form 8-K to be filed by Blockbuster with the U.S. Securities and Exchange Commission.

SOURCE: http://www.prnewswire.com/news-releases/blockbusterr-eliminates-final-24-million-letters-of-credit-agreement-with-viacom-81502362.html