Blockbuster Inc. (BBI) said Friday that it has completed the amendment of its revolving and term loan facility, easing concern about the struggling video rental company's liquidity at least for the time being.

The Dallas, Texas-based company said the amendment includes commitments from lenders for a $250 million revolving loan refinancing with a maturity date on September 30, 2010.

The completion of the amendment is an important milestone for Blockbuster, stated Jim Keyes, Blockbuster Chairman and CEO. We believe the amount that will be available under this extended facility, combined with our cash flow from operations and our cost saving initiatives, will provide the company with adequate liquidity to manage through the challenging macro economic environment and constrained capital markets.

Additionally, Blockbuster said lenders including JPMorgan have agreed to waive any default arising from a 'going concern' qualification for the fiscal year 2008 as part of the terms of the credit facility.

Last month, Blockbuster said it had hired law firm Kirkland & Ellis LLP to help it raise capital and refinance debt, while denying that it planned to file for bankruptcy protection.

Blockbuster has been struggling to cope with the increasing popularity of online video and stiff competition from online rival Netflix, Inc. (NFLX) and digital-video-recorder service TiVo Inc. (TIVO). The company has also been facing some liquidity issues for a while.

The company reported a $360 million fourth quarter loss last month, due to a huge non-cash charge related to the impairment of goodwill and other long lived assets.

Blockbuster shares are currently trading at $0.89, up 6 cents or 7.23%. The shares are trading in a 52-week range of $0.13 to $3.55.

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