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MR. COFFEE ELIMINATES HIGH-RATE DEBTWITH PROCEEDS FROM NEW CREDIT AGREEMENT

 CLEVELAND, March 30 /PRNewswire/ -- Mr. Coffee, inc., (NASDAQ: JAVA) today announced it has entered into a new credit agreement with its current lenders, NBD Bank, N.A., The Huntington National Bank, and Society National Bank. A portion of the funds provided under the new two-year line of credit and four-year term loan will be used to retire Mr. Coffee's remaining high-rate debt.
 Under the terms of the two-year line of credit, maximum availability will be adjusted seasonally from a low of $27,500,000 during the first half of the company's fiscal year to $40,000,000 during the second half of the year. Previously, the company's line of credit provided a seasonally adjusted maximum availability of $36,000,000.
 Proceeds from the four-year $15,000,000 term loan will be used to redeem the remaining $13,000,000 of the company's outstanding 16.5 percent Senior Subordinated Extendible Reset Notes. As previously announced, the Reset Notes will be redeemed as of March 31, 1993, at a price of 106.1875 percent plus accrued and unpaid interest.
 The balance of the proceeds from the term loan as well as funds available under the line of credit will be used to retire Mr. Coffee's remaining $5,600,000 of Senior Term Notes held by Chrysler Capital Corporation.
 In conjunction with the early retirement of the Reset Notes and Term Notes, the company will write off related unamortized deferred financing costs, redemption premiums and prepayment penalties. As a result, the company will record an extraordinary loss net of income tax effect of approximately $1,300,000, or $0.15 per share, during the first quarter of 1993.
 Amounts borrowed under the new line of credit will initially bear interest at prime plus 0.875 percent. The initial interest rate on the new term loan is prime plus 2.875 percent. Borrowings under the new credit agreement will be secured by substantially all of the company's assets. The new credit agreement also contains various restrictive covenants which, among other things, limit the company's ability to incur additional indebtedness and require it to maintain certain financial ratios.
 "The last of the company's high-rate debt is being eliminated and our cost of borrowing has been reduced," stated Richard C. Adamany, senior vice president and chief financial officer. "The new credit agreement not only strengthens our balance sheet but also dramatically reduces interest expense. Over time we intend to reduce our debt burden and interest expense even further. We appreciate the continued confidence in our business expressed by the respected financial institutions with which we have made this important financing agreement."
 Mr. Coffee, inc. is the leading manufacturer of automatic drip coffeemakers in the United States. The company offers an extensive line of automatic drip coffeemakers, coffee filters, and other countertop kitchen appliances. The company also manufactures THE ICED TEA POT(TM), the Potato Perfect(TM) Quick Potato Baker by Mr. Coffee(R), and the Mr. Coffee(R) Water Filter.
 -0- 3/30/93
 /CONTACT: Richard C. Adamany, senior vice president and chief financial officer, Mr. Coffee, inc., 216-464-4000/
 (JAVA)


CO: Mr. Coffee, inc. ST: Ohio IN: SU: FNC

BM -- CL003 -- 0889 03/30/93 09:06 EST
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Publication:PR Newswire
Date:Mar 30, 1993
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