Bank of America affirms gun pledge, hints at Remington loan exit
Bank of America said on Thursday it was standing by its pledge to stop financing civilian assault weapons and suggested it may be preparing to exit a loan for gun maker Remington Outdoor Corp that sparked criticism of the lender.
The statement by Vice Chairman Anne Finucane follows a Reuters report on Sunday that the lender was participating in a $193 million credit facility that will help stabilize Remington`s business when it emerges from bankruptcy this month.
After the report, activists including student gun control activist David Hogg were critical of the bank and took to Twitter using the #BoycottBankofAmerica hashtag. Hogg was a student at the high school in Parkland, Florida, where a February shooting helped touch off a renewed push for stricter U.S. gun control.
"Let me be clear - we are not changing our policy to end financing of the manufacture of these military style firearms," said Finucane, who emphasized the policy change was on a go-forward basis.
She said the Remington financing was in the works for months before the firearms policy was announced on April 10.
A bank spokesman confirmed the statement, which took the form of a letter that Bank of America distributed in response to inquiries about its gun policy.
Bank of America is providing $43.2 million of the credit facility, with the rest coming from six other banks.
The banks have committed to providing the credit, and when Remington exits bankruptcy the credit facility will be established to replace an existing facility of the same size that Remington used to get through its Chapter 11.
The letter also indicated Bank of America may be preparing to exit the Remington credit facility soon after it is financed by selling its participation, as the agreement allows.
"Remington is aware of the policy that we subsequently announced, and that policy will dictate our future actions after the bankruptcy proceedings conclude," said Finucane`s letter.
Bank of America could have faced potential legal action and damages if it had backed out of its commitment to provide the Remington financing, particularly if the company failed to emerge bankruptcy.
In addition, the bank was concerned about its reputation for standing by lending commitments if it reneged on its Remington financing, according to a source familiar with the bank`s thinking.
Remington makes the Bushmaster rifle that was used in the 2012 Sandy Hook school shooting in which 20 children were killed.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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