Struggling department store chain J.C. Penney Co., Inc. (JCP) Thursday said its wholly owned subsidiary, J. C. Penney Corp. has entered into a new five-year $2.25 billion senior secured term loan credit facility, higher than the $1.75 billion expected in the commitment letter the company issued on April 29.
Proceeds of the credit facility will be used to finance the cash tender offer for the notes and to fund ongoing working capital requirements and other general corporate purposes.
The credit facility is guaranteed by the company and certain of its subsidiaries. It is secured by mortgages on some real estate of JCP and the guarantors, in addition to substantially all other assets of JCP and the guarantors.
Goldman Sachs Bank USA was the lead arranger of the term loan credit facility. Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and UBS Securities LLC were the other joint arrangers.
The company also announced that it amended its revolving credit facility to increase the amount of additional first and second lien indebtedness that it can incur to $2.25 billion. This permits the borrowing of the loans under the new term loan credit facility. Pricing and maturity terms under the revolving credit facility remain unchanged.
JCP closed down 1.4 percent on Wednesday at $18.72.
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