J.C. Penney Co., Inc. announced Monday that it has closed its new $2.35 billion credit facility comprised of a $1.850 billion revolving line of credit and a $500 million term loan. The new facility replaces a $1.850 billion credit facility that was slated to mature in April 2016. The company said the new facility also provides better pricing terms than the original.
Shares increased 1.2% to $9.11 in pre-market trading following the news Monday, and closed at $8.69.
Proceeds from the loan will be used to pay down the cash borrowings on the previous facility. The revolving line of credit will be available for working capital and general corporate purposes.
Ed Record, chief financial officer of J.C. Penney, said, “We proactively pursued this new facility to extend the maturity several years and further enhance our liquidity position, particularly during periods of peak working capital needs. We are pleased with the improved pricing terms of this facility as well as the support and confidence from our banking partners.”
The arrangement was co-led by Wells Fargo, Bank of America Merrill Lynch, J.P. Morgan, Barclays and Goldman Sachs.