Daily News: May 23, 2013

Goldman Sachs, Others Arrange J. C. Penney $2.25B Term Loan

J. C. Penney Company announced that its wholly owned subsidiary, J. C. Penney Corporation (JCP), entered into a new five-year $2.25 billion senior secured term loan credit facility. The size of the facility was increased from the $1.75 billion anticipated in the commitment letter the company previously announced.

Goldman Sachs Bank USA was the lead arranger of the term loan credit facility, with Barclays, J.P. Morgan Securities, BofA Merrill Lynch and UBS Securities serving as the other joint arrangers.

Proceeds of the term loan credit facility will be used to finance the cash tender offer for the notes (as defined and described in more detail below) and to fund ongoing working capital requirements and other general corporate purposes. The term loan credit facility is guaranteed by the Company and certain subsidiaries of JCP, and is secured by mortgages on certain real estate of JCP and the guarantors, in addition to substantially all other assets of JCP and the guarantors.

Ken Hanna, JCP chief financial officer said, “We are extremely pleased with the consummation of our term loan and the success of our tender offer. We appreciate the strong demand from investors and their confidence in jcpenney’s future. This new funding gives us the financial flexibility to pursue our plans to put the Company back on a path to profitable growth.”

The company also announced that JCP amended its revolving credit facility to increase the amount of additional first and second lien indebtedness that it can incur to $2.25 billion, which permits the borrowing of the loans under the new term loan credit facility. Pricing and maturity terms under the revolving credit facility remain unchanged.

To read the entire JCP press release, click here.

Previously on abfjournal.com: Goldman Sachs Secures $1.75B Loan for JC Penney, April 29, 2013