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SERVICE MERCHANDISE ANNOUNCES PUBLIC OFFERING OF $100 MILLION OF ITS 8 3/8 SENIOR NOTES DUE 2001

 NASHVILLE, Tenn., Oct. 19 /PRNewswire/ -- Service Merchandise Company, Inc. (NYSE: SME) announced today the public offering of $100 million of its 8 3/8 percent Senior Notes due 2001 priced at 99.621 for a yield to maturity of 8.45 percent. The proceeds of the offering will be used for general corporate purposes, including funding of the Company's planned opening of new stores, and may be used for the prepayment of certain high coupon mortgage indebtedness. The issue will be rated Ba1 by Moody's, BB by Standard and Poors, and BB+ by Duff and Phelps.
 Raymond Zimmerman, Chairman, President and CEO of Service Merchandise, said, "We are extremely pleased to access the capital markets and obtain long-term financing at attractive rates. This will enable the Company to proceed with its plans to open 25 to 30 new stores (prior to the replacement of any existing stores) over the next several years and will reduce the level of working capital financing. It also gives us the flexibility to prepay up to $30 million of existing mortgages with interest rates ranging from 10 to 12.50 percent, thereby reducing the Company's overall debt cost. The Company's long-term plan is to continue deleveraging while at the same time expanding the number of stores at a greater pace than the 17 new stores averaged over the past several years."
 A written prospectus relating to the offering may be obtained by writing the underwriters, Merrill Lynch & Co. at World Financial Center, North Tower, New York, NY 10281 or Chemical Securities Inc. at 270 Park Ave., New York, NY 10017.
 Service Merchandise Company, Inc., "America's Leading Jeweler," operates 376 Service Merchandise stores and 2 Kids Central USA stores in 37 states.
 -0- 10/19/93
 /CONTACT: Sam Cusano, Corporate Vice President-Chief Financial Officer, Service Merchandise Company, Inc., 615-660-3200/
 (SME)


CO: Service Merchandise Company, Inc. ST: Tennessee IN: REA SU: OFR

JM -- CH016 -- 4273 10/19/93 19:20 EDT
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Publication:PR Newswire
Date:Oct 19, 1993
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