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JCPenney Completes $1B Credit Facility

May 2, 2011 8:38 AM   By Jeff Miller
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RAPAPORT... U.S. retailer JCPenney  completed a new five-year $1.25 billion bank credit facility. The new credit replaces a $750 million facility that was scheduled to mature in April 2012 and provides further strength to the department store's liquidity position.

The credit facility may be used for general corporate purposes and will mature in April 2016. In addition, the facility's financial covenant thresholds for both the leverage ratio and fixed charge coverage ratio have been set in alignment with JCPenney's  2011 operating plan and adjusted to remove the impact of non-cash pension expense.

The facility is secured by inventory, which can be released upon attainment of certain credit rating levels. Pursuant to this refinancing, JCPenney expects to incur approximately $9 million in related fees and expenses for its first fiscal quarter.  JCPenney will announce first quarter results on May 16.

Tags: credit, facility, funding, jcpenney, Jeff Miller
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