BofA Agents Sears Holdings $1B New Term Loan Facility
Sears Holdings announced that its wholly owned subsidiaries Sears Roebuck Acceptance and Kmart have borrowed $1 billion under a new a senior secured term loan facility under the company’s existing second amended and restated credit agreement, dated as of April 8, 2011. The existing credit agreement continues to provide for a $3.27 billion asset-based revolving credit facility. According to an SEC filing, Bank of America served as agent.
Net proceeds were used to reduce borrowings under the revolving facility, resulting in borrowings outstanding under the revolving facility of approximately $1 billion.
The incremental term loan is secured by the same collateral as the revolving facility on a pari passu basis with the revolving facility, and guaranteed by the same subsidiaries of the company that guarantee the revolving facility. It matures in June 2018. The revolving facility continues to be scheduled to expire on April 8, 2016.
The company can elect for the incremental term loan to bear interest at a rate of LIBOR (subject to a 1.00% floor) plus a margin of 4.50%, or at a “base rate” plus a margin of 3.50%.