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Sears enters into $400 million secured short-term loan with JPP
By Jennifer Chiou
New York, Sept. 15 – Sears Holdings Corp. entered into a $400 million secured short-term loan with JPP II, LLC and JPP, LLC, according to an 8-K filing with the Securities and Exchange Commission.
Borrowers include Sears, Roebuck and Co., Sears Development Co. and Kmart Corp.
The filing noted that the first $200 million of the loan was funded at closing on Monday, and the remaining $200 million will be funded on Sept. 30.
The loan will mature on Dec. 31, but as long as there is no event of default, the maturity date can be extended to Feb. 28, 2015. There is an extension fee equal to 0.5% of the principal amount.
Sears said that the loan will have an annual base interest rate of 5%. The borrowers are required to pay an upfront fee of 1.75% of the full principal amount.
The loan is guaranteed by Sears Holdings and is secured by a first-priority lien on 25 real properties.
Proceeds will go towards general corporate purposes.
Sears is a Hoffman Estates, Ill.-based retailer.
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