KMART AVOIDS BOND PAYOFF

TROY, Mich. -- Kmart Corp. here said it had reached an agreement in principle with bondholders to sidestep the possibility of paying off $548 million in bonds as soon as next month..If Kmart had been forced to pay off the bonds, it could have been in violation of bank loan covenants and could have been pushed into filing for Chapter 11 bankruptcy protection.

TROY, Mich. -- Kmart Corp. here said it had reached an agreement in principle with bondholders to sidestep the possibility of paying off $548 million in bonds as soon as next month.

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If Kmart had been forced to pay off the bonds, it could have been in violation of bank loan covenants and could have been pushed into filing for Chapter 11 bankruptcy protection.

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