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J. C. Penney Company, Inc.
(the
"Company") announced today that its wholly owned subsidiary, J. C. Penney
Corporation, Inc. ("JCP"), has entered into a new five-year $2.25 billion
senior secured term loan credit facility. The size of the facility was
increased from the $1.75 billion anticipated in the commitment letter the
Company announced on April 29, 2013.
Proceeds of the term loan credit facility will be used to finance the cash
tender offer for the Notes (as defined and described in more detail below) and
to fund ongoing working capital requirements and other general corporate
purposes. The term loan credit facility is guaranteed by the Company and
certain subsidiaries of JCP, and is secured by mortgages on certain real
estate of JCP and the guarantors, in addition to substantially all other
assets of JCP and the guarantors.
Chief Financial Officer Ken Hannah said, "We are extremely pleased with the
consummation of our term loan and the success of our tender offer. We
appreciate the strong demand from investors and their confidence in jcpenney's
future. This new funding gives us the financial flexibility to pursue our
plans to put the Company back on a path to profitable growth. "
Goldman Sachs Bank USA was the lead arranger of the term loan credit facility,
with Barclays, J.P. Morgan Securities LLC, BofA Merrill Lynch and UBS
Securities LLC serving as the other joint arrangers.
The Company also announced today that JCP amended its revolving credit
facility to increase the amount of additional first and second lien
indebtedness that it can incur to $2.25 billion, which permits the borrowing
of the loans under the new term loan credit facility. Pricing and maturity
terms under the revolving credit facility remain unchanged.
Initial Settlement of Tender Offer and Consent Solicitation
The Company, as co-obligor on the Notes, and JCP, as issuer of the Notes,
announced today the acceptance for purchase and payment (the "Initial
Settlement") of all of the $242,782,000 in aggregate principal amount of JCP's
7 1/8% Debentures Due 2023 (CUSIP No. 708160 BE5) (the "Notes") validly
tendered (and not validly withdrawn) prior to 5:00 p.m., New York City time,
on May 20, 2013 (the "Consent Expiration"), pursuant to JCP's previously
announced cash tender offer for the Notes and related solicitation of consents
to certain proposed amendments to the indenture, as amended and supplemented,
governing the Notes (the "Indenture") to eliminate most of the restrictive
covenants and certain events of default and other provisions in the Indenture
(the "Indenture Amendments"). Payment of the tendered Notes pursuant to the
Initial Settlement was made today and holders who validly tendered (and did
not validly withdraw) their Notes prior to the Consent Expiration received a
total consideration equal to $1,450 per $1,000 principal amount of the Notes,
which included a consent payment of $50 for each $1,000 principal amount of
the Notes, plus accrued and unpaid interest to, but not including, the
applicable payment date for the Notes.
As previously announced, upon receipt of the requisite consents from holders
of the Notes, JCP, the Company and Wilmington Trust, National Association, the
successor trustee under the Indenture, executed a supplemental indenture (the
"Supplemental Indenture") to the Indenture to effect the Indenture
Amendments. Pursuant to the terms of the Supplemental Indenture, the
Supplemental Indenture became effective upon execution, and the Indenture
Amendments became operative upon the Initial Settlement. Notes outstanding
following the Initial Settlement are subject to the terms of the Supplemental
Indenture even if the holders of such Notes did not consent to the Indenture
Amendments.
The tender offer will expire at 11:59 p.m., New York City time, on June 4,
2013, unless extended or terminated (such date and time, as the same may be
extended or earlier terminated, the "Expiration Time"). Holders who tender
their Notes after the Consent Expiration, but before the Expiration Time, will
be eligible to receive $1,400 per $1,000 principal amount of the Notes, plus
accrued and unpaid interest to, but not including, the applicable payment date
for the Notes.
Goldman, Sachs & Co. is acting as dealer manager and solicitation agent for
the tender offer and consent solicitation. Questions regarding the tender
offer and consent solicitation may be directed to Goldman, Sachs & Co. at
(800) 828-3182 (toll-free) or (212) 902-5183 (collect).
D.F. King & Co., Inc. is acting as tender and information agent for the tender
offer and consent solicitation. Requests for copies of the tender offer
documents may be directed to D.F. King & Co., Inc. at (212) 269-5550 (banks
and brokers) or (800) 290-6427 (toll-free).
This press release is for informational purposes only and does not constitute
an offer to purchase or the solicitation of an offer to sell any Notes. The
tender offer is not being made in any jurisdiction in which the making or
acceptance thereof would not be in compliance with the securities, blue sky or
other laws of such jurisdiction. No recommendation is made as to whether or
not holders of Notes should tender their Notes pursuant to the tender offer.
The tender offer is being made solely pursuant to the tender offer documents,
which more fully set forth and govern the terms and conditions of the tender
offer. The tender offer documents contain important information and should be
read carefully before any decision is made with respect to the tender offer.
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