- Closes on previously announced $1.3 billion of senior secured
notes
- Closes on new $3.15 billion asset-based credit agreement
Macy’s, Inc. (NYSE:M) today announced the closing on
approximately $4.5 billion of new financing, including its
previously announced $1.3 billion of 8.375% senior secured notes,
as well as a new $3.15 billion asset-based credit agreement. In
addition, the company has amended and substantially reduced the
credit commitments of its existing $1.5 billion unsecured credit
agreement. The company intends to use the proceeds of the notes
offering, along with cash on hand, to repay the outstanding
borrowings under the existing $1.5 billion unsecured credit
agreement.
With the closing of these financings, the company expects to
have sufficient liquidity to address the needs of the business,
including funding operations and the purchase of new inventory for
upcoming merchandising seasons, resolving its accrued payables
obligations, and repaying upcoming debt maturities in fiscal 2020
and fiscal 2021.
“We are pleased with the strong demand from new investors in our
notes issuance, which allowed us to tighten pricing and increase
the size of the offering. The high quality of our real estate
portfolio positioned us well to execute this offering.
Additionally, the continued commitment from our bank group allowed
us to more than double the size of our existing revolving credit
facility. Together, the notes offering and asset-based credit
agreement provide Macy’s, Inc. with approximately $4.5 billion of
borrowings and commitments, giving us sufficient flexibility and
liquidity to navigate our current environment and fund our business
for the foreseeable future,” said Jeff Gennette, chairman and chief
executive officer of Macy’s, Inc. “Combined with our ongoing
Polaris initiatives, we are confident this liquidity will ensure
Macy’s, Inc. remains a strong company to work for, invest in and
partner with.”
Closing of Senior Secured Notes Offering
Macy’s, Inc. today closed on its previously announced 8.375%
senior secured notes offering of $1.3 billion. The notes will
mature in June 2025. The notes were issued by Macy’s, Inc. and are
secured on a first-priority basis by (i) a first mortgage/deed of
trust in certain real property of subsidiaries of Macy’s that were
transferred to subsidiaries of Macy’s Propco Holdings, LLC, a newly
created direct, wholly-owned subsidiary of Macy’s (“Propco”) and
(ii) a pledge by Propco of the equity interests in its subsidiaries
that own such transferred real property. The notes are, jointly and
severally, unconditionally guaranteed on a secured basis by Propco
and its subsidiaries and unconditionally guaranteed on an unsecured
basis by Macy’s Retail Holdings, LLC., a direct, wholly owned
subsidiary of Macy’s, Inc.
Closing of New Asset-Based Credit Agreement
In addition, the company today closed on a new $3.15 billion
asset-based credit agreement. The asset-based credit agreement will
mature in May 2024 and includes a short-term facility of $300
million that will mature in December 2020. The asset-based credit
agreement also contains an accordion feature that will enable the
company to request increases in the size of the facility up to an
additional aggregate principal amount of $750 million. The new
asset-based credit agreement is secured by all assets and common
equity of the newly formed Macy’s Inventory Funding LLC, which has
purchased the vast majority of the company’s inventory, and which
is the borrower under the new asset-based credit agreement.
Amendment of Existing Revolving Credit Agreement
In conjunction with these financing activities, the company has
substantially amended its existing $1.5 billion unsecured revolving
credit agreement to reduce the available credit commitment and
modify the agreement’s covenants. The amended revolving credit
agreement provides the company with unsecured revolving credit of
up to $75 million.
Advisors
The company was advised on these transactions by Lazard,
Kirkland & Ellis and Jones Day. Additionally, Eastdil Secured
served as the company’s real estate advisor.
Credit Suisse and JP Morgan served as joint physical book
runners on the company’s senior secured notes issuance. Bank of
America and Goldman Sachs served as book runners on the notes
issuance.
Bank of America is serving as the Administrative Agent and Lead
Arranger on the company’s asset-based credit agreement.
This news release shall not constitute an offer to sell or the
solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction.
About Macy’s, Inc.
Macy’s, Inc. (NYSE: M) is one of the nation’s premier
omni-channel fashion retailers, with fiscal 2019 sales of $24.6
billion. The company comprises three retail brands, Macy’s,
Bloomingdale’s and Bluemercury. Macy’s, Inc. is headquartered in
New York, New York.
Forward-Looking Statements
All statements in this press release that are not statements of
historical fact are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon the current beliefs and expectations of
Macy’s management and are subject to significant risks and
uncertainties. Actual results could differ materially from those
expressed in or implied by the forward-looking statements contained
in this release because of a variety of factors, including the
finalization of Macy’s financial statements as of and for the 13
weeks ended May 2, 2020, including the actual amount of the
impairment charges that it expects to incur for the period, the
effects of the novel coronavirus (COVID-19) on customer demand, its
supply chain as well as its consolidated results of operation,
financial position and cash flows, Macy’s ability to obtain
additional financing on commercially acceptable terms or at all,
Macy’s ability to successfully implement its Polaris strategy,
including the ability to realize the anticipated benefits within
the expected time frame or at all, conditions to, or changes in the
timing of proposed real estate and other transactions, prevailing
interest rates and non-recurring charges, the effect of potential
changes to trade policies, store closings, competitive pressures
from specialty stores, general merchandise stores, off-price and
discount stores, manufacturers’ outlets, the Internet, catalogs and
television shopping and general consumer spending levels, including
the impact of the availability and level of consumer debt, possible
systems failures and/or security breaches, the potential for the
incurrence of charges in connection with the impairment of
intangible assets, including goodwill, Macy’s reliance on foreign
sources of production, including risks related to the disruption of
imports by labor disputes, regional or global health pandemics, and
regional political and economic conditions, the effect of weather
and other factors identified in documents filed by the company with
the Securities and Exchange Commission, including under the
captions “Forward-Looking Statements” and “Risk Factors” in the
Company’s Annual Report on Form 10-K for the year ended February 1,
2020 and “COVID-19 Risk Factor” in the Company’s Current Report on
Form 8-K filed on May 26, 2020. Macy’s disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
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version on businesswire.com: https://www.businesswire.com/news/home/20200608005715/en/
Media – Blair Rosenberg media@macys.com
Investors – Mike McGuire investors@macys.com
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