News Column

JC Penney closes $2.35 billion credit facility

June 23, 2014



PLANO, Texas (AP) J.C. Penney has closed a new credit facility that executives say will provide the retailer with more flexibility when cash is needed.

Cash burn has been a concern among industry watchers as the retailer attempts to recover from a failed turnaround under one-time Apple executive Ron Johnson.

The new $2.35 billion senior secured credit facility, replacing a $1.85 billion facility set to mature in April 2016.

The new facility has better pricing terms than the previous one, according to J.C. Penney, and includes a $1.85 billion revolving credit line, as well as a $500 million term loan. The company said Monday that the loan's proceeds would be used to pay down the previous facility. The Plano, Texas retailer said the revolving credit line will be for working capital and general corporate purposes.

Chief Financial Officer Ed Record said new terms will extend the maturity several years and enhance the company's liquidity position, especially during times of peak working capital needs.

Shares of J.C. Penney Co. declined 16 cents to $8.84 in afternoon trading.


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Source: Associated Press


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