Eckerd, banks amend terms of debt pact. (Eckerd Corp.)

LARGO, Fla.--Eckerd Corp. has entered into an amended agreement with its two largest creditors and 36 other financial institutions which refinances the drug chain's $850 million in outstanding debt.

Under the agreement, Eckerd's floating rate spread will be reduced from 2.75% to 3% over LIBOR (the international equivalent of a certificate of deposit rate) to 1.5% over LIBOR. The lower rate is expected to save the company about $7 million a year in interest payments.

A spokesman for the retailer says that the agreement also provides for further rate reductions as Eckerd achieves certain undisclosed debt levels and targeted financial goals.

While the new …