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Sears gets $100 million 11% initial loan, may draw $100 million more
By Susanna Moon
Chicago, Oct. 5 – Sears Holdings Corp. entities borrowed another $100 million on Wednesday from lenders, raising the total amount of the amended agreement to $499.4 million, according to an 8-K filing with the Securities and Exchange Commission.
The initial incremental loan was made through Sears, Roebuck and Co., Kmart Stores of Illinois LLC, Kmart of Washington LLC, Kmart Corp., SHC Desert Springs, LLC, Innovel Solutions, Inc., Sears Holdings Management Corp., Maxserv, Inc. and Troy Coolidge No. 13, LLC, which are companies that are wholly owned and controlled, directly or indirectly, by the company.
The company may draw up to another $100 million of loans by Dec. 1.
The incremental loans mature on April 3, 2018. The original loans under the amended loan agreement are due July 20, 2020.
Interest on the incremental loans is 11%, with accrued interest payable monthly.
Proceeds will be used for general corporate purposes.
As with the existing loans, the initial incremental loan is guaranteed by the company and is secured by a first priority lien on 61 real properties owned by the borrowers.
If there is an event of default, the lenders may declare all or some of the outstanding debt to be immediately due and payable, as well as to require the borrowers to pay a default interest rate equal to the greater of 250 basis points in excess of the base interest rate and the prime rate plus 100 bps.
Sears is a retailer based in Hoffman Estates, Ill. Edward S. Lampert, Sears’ chief executive officer and chairman, is the only stockholder, chief executive officer and director of ESL Investments, Inc., which controls JPP and JPP II.
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