Sears details amendment, extension to secured short-term facility

By Marisa Wong

Morgantown, W.Va., May 24 – Sears Holdings Corp. amended and restated its $500 million secured short-term loan facility on May 22 and disclosed details of the amendment in an 8-K filed Wednesday with the Securities and Exchange Commission.

The restated facility requires the repayment of $100 million of the outstanding loans on the original maturity date of July 7, 2017 but extends the maturity for $400 million of the outstanding loans until Jan. 7, 2018.

The restated facility also grants the company options to further extend the maturity of the loan for up to an additional six months, to July 6, 2018.

The restated loan will have an annual base interest rate of 8%, with accrued interest payable monthly during the term of the facility.

In connection with the amendment, the company paid a one-time extension fee of $8 million to the extending lenders. The lenders under the facility include JPP, LLC, JPP II, LLC and Cascade Investment, LLC. JPP and JPP II are controlled by ESL Investments, Inc., whose sole stockholder, chief executive officer and director is Edward S. Lampert, CEO and chairman of Sears Holding.

The loan is guaranteed by Sears Holdings and is secured by a first-priority lien on 20 real properties owned by the borrowers, Sears, Roebuck and Co., Sears Development Co., Innovel Solutions, Inc., Big Beaver of Florida Development, LLC and Kmart Corp.

Sears is a retailer based in Hoffman Estates, Ill.

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