J.C. Penney increased its borrowing capacity under a bank credit facility by $100 million to $1.85 billion and expanded an option to borrow more at a later date, raising concerns among analysts as it works on a turnaround.
According to an 8-K filing, J.P. Morgan Securities, Merrill Lynch, Barclays and Wells Fargo Capital Finance acted as joint bookrunners and lead arrangers for the transaction. Bank of America, Barclays Bank and Wells Fargo Bank acted as joint documentation agents. The deal was led by JPMorgan Chase as administrative agent for a 27-bank lender group and Wells Fargo Bank, as LC agent. (See below for institutional commitments)
The new arrangements included a $150 million increase in the credit facility’s accordion feature to $400 million and a $250 million increase in an additional feature, analysts said. An accordion feature allows a borrower to expand a credit facility at a later date.
Penney, which operates 1,100 department stores, began a turnaround a year ago that called for the elimination of most coupons and sales events. Long-term customers, trained for years to seek out discounts, balked at the new pricing strategy and reeled in purchases.
INSTITUTION COMMITMENT
JPMorgan Chase Bank
$187,500,000
Bank of America
$187,500,000
Barclays Bank
$187,500,000
Wells Fargo Bank
$187,500,000
UBS Loan Finance
$100,000,000
BBVA Compass
$90,000,000
HSBC Bank USA
$90,000,000
The Royal Bank of Scotland
$75,000,000
U.S. Bank
$75,000,000
Citibank
$60,000,000
Goldman Sachs Bank USA
$60,000,000
The Bank of New York Mellon
$45,000,000
Standard Chartered Bank
$45,000,000
State Street Bank and Trust Company
$45,000,000
UMB Bank
$45,000,000
Regions Bank
$45,000,000
Siemens Financial Services
$45,000,000
PNC Bank
$45,000,000
City National Bank
$32,500,000
Flagstar Bank
$32,500,000
The Bank of Tokyo-Mitsubishi UFJ
$30,000,000
Union Bank
$30,000,000
KeyBank
$25,000,000
Banco Popular de Puerto Rico
$25,000,000
The Northern Trust Company
$25,000,000
Capital One
$25,000,000
Chang Hwa Commercial Bank
$10,000,000
Total
$1,850,000,000
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