JCPenney paid off its $506 million take-back term loan on Dec. 1. The company used its existing liquidity position to reduce its debt and save interest as the business continues its transformation.
The take-back term loan was held by JCPenney’s debtor-in-possession and first lien lenders following the company’s restructuring in 2020. Following this refinancing, JCPenney will have reduced its debt outstanding from $800 million to $500 million and will have approximately $1.8 billion available liquidity.
JCPenney also completed a refinancing of its asset-based loan and first in, last out facilities on Dec. 16. The newly refinanced ABL and FILO facilities will mature on Dec. 16, 2026, and have improved availability, pricing and other favorable terms relative to its prior facilities. The ABL facility, which was led by Wells Fargo and PNC, will consist of a $1.75 billion ABL credit facility and a $160 million term loan. Pathlight Capital led the FILO facility, which totals $340 million.
“The paydown of our outstanding term loan and refinancing of our ABL and FILO facilities is a testament to JCPenney’s results over the last year and represents further strengthening of our balance sheet,” Stanley Shashoua, executive chairman at JCPenney, said.
“Our continued impressive liquidity position leaves us with strong financial flexibility to accelerate business growth as we continue to evolve while delivering affordable fashion and a great shopping experience for American families,” Marc Rosen, CEO of JCPenney, said.