Bloomberg News

J.C. Penney Plans $500 Million Loan to Refinance Revolver

June 03, 2014

J.C. Penney Co. (JCP:US), the retailer that saw its first sales gain (JCP:US) in three years last quarter, is marketing a $500 million term loan as part of a $2.35 billion financing, according to a person with knowledge of the deal.

The debt will be used to refinance an asset-backed revolving credit line, according to the person, who asked not to be identified without authorization to speak publicly. Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., Barclays Plc and Goldman Sachs Group Inc. are arranging the loan, which is due in 2019, the person said. A lender meeting is scheduled for June 5 at 9 a.m. in New York.

The century-old department-store chain, which has $5.5 billion of total debt, reported a 6.3 percent first-quarter revenue increase on May 16, reversing a string of sales declines that stretched back to 2011. A successful refinancing of its $1.85 billion credit facility will leave J.C. Penney with less than $500 million (JCP:US) of debt coming due before the end of 2016.

The Plano, Texas-based company has drawn $650 million from the revolver, which comes due in April 2016, according to data compiled by Bloomberg. J.C. Penney obtained a commitment from the banks for an asset-based revolving credit and term loan facility totaling $2.35 billion, according to a May 19 regulatory filing.

The chain pays interest at 3 percentage points more than the London interbank offered rate on the revolver, Bloomberg data show.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Shannon D. Harrington at sharrington6@bloomberg.net Chapin Wright, John Parry


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Companies Mentioned

  • JCP
    (JC Penney Co Inc)
    • $9.23 USD
    • 0.01
    • 0.11%
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