Sears Holdings Announces Secured Line Of Credit Facility And Real Estate Transactions
HOFFMAN ESTATES, Ill., July 7, 2017 /PRNewswire/ -- Sears Holdings Corporation (NASDAQ: SHLD) today announced that it has entered into an amendment to its existing Second Lien Credit Facility dated September 1, 2016. The amended credit facility provides an uncommitted line of credit facility (the "Line of Credit Facility") under which subsidiaries of the Company may from time to time borrow line of credit loans ("Line of Credit Loans"), subject to applicable borrowing base limitations, in an aggregate principal amount not to exceed $500 million at any time outstanding. Individual Line of Credit Loans under the Line of Credit Facility are expected to have maturities of up to 179 days and will be on pricing and other terms to be agreed with the lenders that are or become party to the Second Lien Credit Facility. Mr. Edward S. Lampert, the Company's Chief Executive Officer and Chairman, is the sole stockholder, chief executive officer and director of ESL Investments, Inc. ("ESL"), which controls the Agent under the Line of Credit Facility. ESL has indicated that it is considering participating in the Line of Credit Facility as a lender, but ESL is under no obligation to do so. The Company intends to discuss additional Line of Credit Facility advances with additional lenders from time to time.
"This facility is intended to provide the Company with the flexibility to generate additional liquidity on an as-needed basis. Any extensions of credit under this facility are collateralized by a second lien on certain of our inventory, receivables and related assets. This adjustment to our capital structure demonstrates that Sears Holdings will continue to take actions to generate liquidity and manage our business while meeting all of our financial obligations," said Rob Riecker, Sears Holdings' Chief Financial Officer.
Additionally, in June the Company closed on over $200 million of real estate transactions, which resulted in a paydown of the April 2016 Real Estate Loan from $500 million to $347 million. These actions also increased availability under the short term borrowing basket in the Company's ABL credit facility, pursuant to which the Company can raise up to $1.0 billion in loans that can mature within the June 2020 ABL maturity. After the partial loan repayment, the real estate loan will be utilizing approximately $350 million of the $1.0 billion basket compared to $500 million previously. Additional net proceeds of $57 million from the real estate transactions were used to reduce the outstanding balance on our revolving credit facility.
The terms of the Line of Credit Facility and, to the extent funded by ESL, the initial Line of Credit Loans were approved by the Related Party Transactions Subcommittee of the Board of Directors of the Company, with advice from Centerview Partners and Weil Gotshal & Manges, the Subcommittee's outside financial and legal advisors.
Forward-Looking Statements
This press release contains forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements about our transformation through our integrated retail strategy, our plans to redeploy and reconfigure our assets, our liquidity, our ability to borrow under the Line of Credit Facility, which is uncommitted, and our ability to exercise financial flexibility as we meet our obligations. Whenever used, words such as "will," "intend," "expect," and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements, including these, are based on the current beliefs and expectations of our management and are subject to significant risks, assumptions and uncertainties, many of which are beyond the Company's control, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Detailed descriptions of risks, uncertainties and factors relating to Sears Holdings are discussed in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. While we believe that our forecasts and assumptions are reasonable, we caution that actual results may differ materially. We intend the forward-looking statements to speak only as of the time made and do not undertake to update or revise them as more information becomes available, except as required by law.
About Sears Holdings Corporation
Sears Holdings Corporation (NASDAQ: SHLD) is a leading integrated retailer focused on seamlessly connecting the digital and physical shopping experiences to serve our members – wherever, whenever and however they want to shop. Sears Holdings is home to Shop Your Way®, a social shopping platform offering members rewards for shopping at Sears and Kmart as well as with other retail partners across categories important to them. The company operates through its subsidiaries, including Sears, Roebuck and Co. and Kmart Corporation, with full-line and specialty retail stores across the United States. For more information, visit www.searsholdings.com.
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
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SOURCE Sears Holdings Corporation
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