JCPENNEY ANNOUNCES PLANS TO RETIRE $500 MILLION ASSET-BASED TERM LOAN
November 16 2015 - 3:25PM
Plans to
upsize Asset-Based Revolving Credit Facility and reduce annual
interest payments by approximately $20 million; Overall Facility
Size Remains Unchanged at $2.35 Billion
PLANO, Texas - (Nov 16, 2015)
- J. C. Penney Company, Inc. (NYSE: JCP) announced today that it
has received $500 million of incremental bank commitments to
increase the size of the Revolving Line of Credit under its
existing Senior Secured Asset-Based Credit Facility ("ABL") to
$2.35 billion from $1.85 billion. In connection with upsizing
the revolving credit facility, the Company also intends to prepay
and retire the outstanding principal amount of its $500 million
Term Loan previously issued under the ABL, which is scheduled to
mature in June 2019. The Company expects to close these
transactions in December.
The Company expects that retirement of the ABL
Term Loan will reduce interest expense by approximately $20 million
annually, beginning in 2016. The $2.35 billion ABL revolving
line of credit, which will also mature in June 2019, will remain
available for seasonal working capital needs and general corporate
purposes.
Marvin Ellison, chief executive officer, said, "We
proactively pursued this transaction to reduce our long-term debt
and ongoing interest expense and to further enhance our financial
flexibility while maintaining our strong liquidity position as we
continue to make progress on our goal of $1.2 billion in EBITDA by
2017."
The arrangement and syndication of the revolving
credit facility increase will be co-led by Wells Fargo, J.P.
Morgan, Barclays, Bank of America Merrill Lynch, Citizens Bank,
Regions Bank and HSBC.
Media
Relations:
(972) 431-3400 or jcpnews@jcp.com
Investor Relations:
(972) 431-5500 or jcpinvestorrelations@jcpenney.com
About JCPenney:
J. C. Penney Company, Inc. (NYSE: JCP), one of the nation's largest
apparel and home furnishing retailers, is dedicated to fitting the
diversity of America with unparalleled style, quality and value.
Across approximately 1,020 stores and at jcpenney.com, customers
will discover a broad assortment of national, private and exclusive
brands to fit all shapes, sizes, occasions and budgets. For
more information, please visit jcpenney.com.
Forward-Looking
Statements
This release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expect" and similar expressions identify
forward-looking statements, which include, but are not limited to,
statements regarding the ABL, interest expense and
earnings. Forward-looking statements are based only on the
Company's current assumptions and views of future events and
financial performance. They are subject to known and unknown risks
and uncertainties, many of which are outside of the Company's
control that may cause the Company's actual results to be
materially different from planned or expected results. Those risks
and uncertainties include, but are not limited to, general economic
conditions, including inflation, recession, unemployment levels,
consumer confidence and spending patterns, credit availability and
debt levels, changes in store traffic trends, the cost of goods,
more stringent or costly payment terms and/or the decision by a
significant number of vendors not to sell us merchandise on a
timely basis or at all, trade restrictions, the ability to monetize
non-core assets on acceptable terms, the ability to implement our
strategic plan, customer acceptance of our strategies, our ability
to attract, motivate and retain key executives and other
associates, the impact of cost reduction initiatives, our ability
to generate or maintain liquidity, implementation of new systems
and platforms, changes in tariff, freight and shipping rates,
changes in the cost of fuel and other energy and transportation
costs, disruptions and congestion at ports through which we import
goods, increases in wage and benefit costs, competition and retail
industry consolidations, interest rate fluctuations, dollar and
other currency valuations, the impact of weather conditions, risks
associated with war, an act of terrorism or pandemic, the ability
of the federal government to fund and conduct its operations, a
systems failure and/or security breach that results in the theft,
transfer or unauthorized disclosure of customer, employee or
Company information, legal and regulatory proceedings and the
Company's ability to access the debt or equity markets on favorable
terms or at all. There can be no assurances that the Company
will achieve expected results, and actual results may be materially
less than expectations. Please refer to the Company's most
recent Form 10-Q for a further discussion of risks and
uncertainties. Investors should take such risks into account and
should not rely on forward-looking statements when making
investment decisions. Any forward-looking statement made by us in
this press release is based only on information currently available
to us and speaks only as of the date on which it is made. We
do not undertake to update these forward-looking statements as of
any future date.
###
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: J. C. Penney Company, Inc. via Globenewswire
HUG#1967233
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