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Movie Gallery Sales Slide

It sets refinancing plans.

Movie Gallery (MOVI) said same-store revenue dropped 2.9% in the fourth quarter.

The Dothan, Ala., video rental chain said it expects to post revenue of $2.54 billion for the year. Analysts surveyed by Thomson Financial were looking for revenue of $2.55 billion.

The company also said it will meet with prospective senior secured lenders in New York today. The company plans to refinance its senior secured credit facility through Goldman Sachs in a deal that will included a $100 million revolving credit facility, which is expected to be fully available and undrawn upon at closing; a $525 million first lien term loan; a $25 million synthetic letter of credit facility; and a $250 million second lien term loan.

Movie Gallery will use the proceeds of the financing to refinance its existing senior secured credit facility, replace existing letters of credit, provide for working capital, pay fees and expenses associated with the transaction, and for other general corporate purposes. No incremental debt (other than to cover fees and expenses) will be incurred at the closing of the financing.

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