Sears units obtain $500 million 8% 15-month committed loan facility

By Susanna Moon

Chicago, April 8 – Sears Holdings Corp. said some of its subsidiaries obtained a $500 million 8% 15-month committed secured loan facility.

Of the amount, $250 million was funded on Friday and up to another $250 million may be drawn by the borrowers under the facility due July 2017.

Proceeds will provide the company with “additional financial flexibility as it executes on its transformation to a more asset-light integrated retailer leveraging its membership-based Shop Your Way program,” according to a company announcement.

Eastdil Secured will manage the loan syndication. Under the terms, the company said it is required to retain a broker and use commercially reasonable efforts to syndicate the facility.

ESL Investments, Inc. and Cascade Investment, LLC each provided $125 million of the initial $250 million drawn under the loan facility and have committed to provide any portion of the loan facility that is not syndicated to other lenders. Edward Lampert, the company's chief executive officer and chairman, controls ESL Investments.

The facility is secured by mortgages on 13 real properties owned by the company's subsidiaries and will be secured by an additional eight real properties beginning on the date any additional amounts are drawn.

The loans are guaranteed by the company.

"We have an asset rich portfolio, which provides us with numerous options to finance our transformation strategy," Robert A. Schriesheim, the company’s executive vice president and chief financial officer, said in the press release.

“As we have consistently demonstrated, we will continue to take actions to adjust our capital structure and manage our business to enable us to execute on our transformation while meeting all of our financial obligations."

Sears is a Hoffman Estates, Ill.-based retailer.

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