HOFFMAN ESTATES, Ill.,
March 21, 2018 /PRNewswire/
-- Sears Holdings Corporation ("we" or the "Company") (NASDAQ:
SHLD) today announced that it has completed its previously
announced private offers to exchange (i) 8% Senior Unsecured Notes
due 2019 (the "Old Senior Unsecured Notes") issued by the Company
for a like principal amount of 8% Senior Unsecured Convertible PIK
Toggle Notes due 2019 of the Company (the "New Senior Unsecured
Notes") and (ii) 6 5/8% Senior Secured Notes due 2018 (the "Old
Senior Secured Notes" and, together with the Old Senior Unsecured
Notes, the "Old Notes") issued by the Company for a like
principal amount of 6 5/8% Senior Secured Convertible PIK
Toggle Notes due 2019 of the Company (the "New Senior Secured
Notes" and together with the New Senior Unsecured Notes, the "New
Notes") (the offers to exchange, the "Exchange Offers").
Pursuant to the Exchange Offers, approximately $214 million aggregate principal amount of Old
Senior Unsecured Notes and approximately $170 million aggregate principal amount of Old
Senior Secured Notes were validly tendered, accepted and cancelled
and a like amount of New Senior Unsecured Notes and New Senior
Secured Notes, as applicable, were issued in respect thereof.
In connection with the completion of the Exchange Offers, the
Company has also obtained the requisite consent of holders of Old
Senior Secured Notes to adopt amendments to the indenture governing
such notes to eliminate substantially all of the restrictive
covenants and certain events of default in such indenture, and make
the liens securing senior second lien obligations, including the
New Senior Secured Notes and obligations under the second lien
credit agreement described below, effectively senior to the liens
securing junior second lien obligations, including the Old Senior
Secured Notes.
The New Senior Unsecured Notes are convertible into common stock
of the Company, at a conversion price of 120 shares per
$1,000 in principal amount of
indebtedness (or approximately $8.33
in principal amount per share), with interest on such notes to be
payable in kind at the Company's option. The New Senior Secured
Notes are convertible into common stock of the Company, at a
conversion price of 200 shares per $1,000 in principal amount of indebtedness (or
$5 in principal amount per share),
with interest on such notes to be payable in kind at the Company's
option. The New Senior Unsecured Notes and the New Senior
Secured Notes are optionally convertible by the holders thereof,
and are mandatorily convertible at the Company's option if the
volume weighted average trading price of the common stock on the
NASDAQ exceeds $10 for a prescribed
period.
The Company also entered into an amendment to its existing
second lien credit agreement to include a feature, with respect to
the term loan outstanding thereunder, permitting the payment of
interest in kind at the Company's option and to provide that the
Company's obligation with respect to such term loan is convertible
into common stock of the Company, on substantially the same
conversion terms as the New Senior Secured Notes.
The Company's subsidiary, Sears Roebuck Acceptance Corp.
("SRAC"), also consummated a negotiated exchange with certain third
parties (the "Noteholders") holding approximately $100
million in principal amount of senior unsecured notes maturing
between 2027 and 2043 and bearing interest at rates between 6.50%
and 7.50% per annum issued by SRAC (the "SRAC Notes"), for new
unsecured notes (the "New SRAC Exchange Notes") maturing
in March 2028, which New SRAC Exchange Notes bear interest at
a rate equal to 7.00% per annum (which interest may be paid in kind
at the option of the Company at rate equal to 12.00% per annum).
The SRAC Exchange Notes are guaranteed by the same subsidiaries of
the Company which guarantee the New Senior Secured Notes.
If all of the forgoing indebtedness is paid in kind at the
Company's option, the Company's quarterly cash interest expenses
will be reduced by approximately $15
million.
"The completion of these previously announced transactions will
strengthen our financial footing as we continue to execute on our
strategic transformation," said Edward S.
Lampert, the Company's Chief Executive Officer. "We remain
resolutely committed to enhancing our liquidity and working
aggressively to return the Company to profitability."
About Sears Holdings Corporation
Sears Holdings
Corporation (NASDAQ: SHLD) is a leading integrated retailer focused
on seamlessly connecting the digital and physical shopping
experiences to serve our members - wherever, whenever and however
they want to shop. Sears Holdings is home to Shop Your Way®, a
social shopping platform offering members rewards for shopping at
Sears and Kmart as well as with other retail partners across
categories important to them. The company operates through its
subsidiaries, including Sears, Roebuck and Co. and Kmart
Corporation, with full-line and specialty retail stores
across the United States. For more information,
visit www.searsholdings.com.
Forward-Looking Statements
This press release contains
forward-looking statements intended to qualify for the safe harbor
from liability established by the Private Securities Litigation
Reform Act of 1995. Whenever used, words such as "will,"
"intends," "expects," and other terms of similar meaning are
intended to identify such forward-looking statements.
Forward-looking statements, including these, are based on the
current beliefs and expectations of our management and are subject
to significant risks, assumptions and uncertainties, many of which
are beyond the Company's control, that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by these forward-looking statements. Detailed descriptions
of other risks relating to Sears Holdings are discussed in our most
recent Annual Report on Form 10-K and other filings with the
Securities and Exchange Commission. While we believe that our
forecasts and assumptions are reasonable, we caution that actual
results may differ materially. We intend the forward-looking
statements to speak only as of the time made and do not undertake
to update or revise them as more information becomes available,
except as required by law.
NEWS MEDIA CONTACT:
Sears Holdings Public Relations
(847) 286-8371
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SOURCE Sears Holdings Corporation