HOFFMAN ESTATES, Ill.,
Dec. 12, 2017 /PRNewswire/
-- Sears Holdings Corporation ("Holdings," "we," "us," "our,"
or the "Company") (NASDAQ: SHLD) announced today it has entered
into an agreement to extend the maturity of its existing term loan,
which originally was to mature in June
2018 (the "Term Loan"), to January
2019, with the option to further extend the maturity to
July 2019. During the fourth quarter,
the Company paid down the Term Loan by $325
million, reducing the outstanding balance to approximately
$400 million and bringing our total
Term Loan repayment during 2017 to approximately $570 million.
In addition, the Company announced it intends to obtain a new
secured credit facility (the "Secured Credit Facility") in
connection with the agreement reached with the Pension Benefit
Guaranty Corporation ("PBGC") on November 7,
2017, that provides for the release of 138 of our properties
from a ring-fence arrangement with the PGBC. The Secured Credit
Facility is expected to be secured by such properties and consist
of an approximately $407 million (net
of associated costs) first lien tranche and a second lien tranche
of up to $200 million. The Company
intends to use the net proceeds from the Secured Credit Facility to
fund the payment of approximately $407
million into the Sears pension plans and for general
corporate purposes. Following the funding of the $407 million pension contribution, Holdings will
be relieved of the obligation to make further contributions to the
pension plans for approximately two years (other than a
$20 million supplemental payment due
in Q2 2018). Holdings expects to repay the Secured Credit Facility
over time with the proceeds from sales of the underlying
properties.
"As indicated in our third quarter earnings announcement, we
have taken further action to provide the Company with additional
financial flexibility as we enter 2018," said Rob Riecker, Sears Holdings' chief financial
officer. "The extension of the Term Loan improves our short-term
debt maturity profile, while the credit facility associated with
the PBGC agreement will support our continued commitment to the
Company's pension plans while enhancing our financial
flexibility."
"Looking ahead, we continue to explore alternatives with respect
to our debt maturities to meaningfully reduce cash interest
payments and provide the Company greater flexibility. In addition
to the liquidity actions announced today, we remain focused on
improving our performance by diversifying the Company's revenue
streams through third-party partnerships for several of our
businesses; developing new ways to leverage our innovative Shop
Your Way platform to better invest marketing dollars at the member
level; and maintaining extreme cost discipline in light of
continued headwinds across the retail sector," concluded Mr.
Riecker.
The Company engaged BofA Merrill Lynch to arrange the Term Loan
extension. In addition, Holdings has retained UBS Investment Bank
as its financial advisor for the Secured Credit Facility. The
completion of the Secured Credit Facility is subject to obtaining
lender commitments, as well as market and other conditions.
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, including, but not limited to, statements about
our plan to obtain the Secured Credit Facility, our liquidity, our
ability to exercise financial flexibility as we meet our
obligations and other statements that describe the Company's plans.
Whenever used, words such as "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 the Company 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