PHILADELPHIA -- Wachovia Bank, National Association and Wachovia Capital Markets have agreed to underwrite and syndicate a $200 million senior secured term loan facility for auto parts retailer Pep Boys. The loan facility is expected to be completed in Jan./Feb. 2006. The proceeds from the facility will be used to repay $43 million and $100 million in outstanding medium term notes that mature in 2006 and reduce borrowings under the company's revolving credit facility.

By retiring the medium term notes (through defeasance or repayment), Pep Boys will eliminate certain indenture restrictions on its ability to sell, encumber or otherwise utilize its real estate portfolio, a portion of which will be used to secure the new Wachovia facility.

"Pre-financing our 2006 maturities will ensure that the company can execute on our strategy to optimize our retail and service operations and in turn, improve long-term shareholder value,” said Pep Boys CFO Harry Yanowitz. “In addition, the new facility's prepayment and collateral substitution rights will allow the company to continue the process of improving capital allocation, ensuring that each of its properties can be developed to its highest and best use."

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