Sears lines up $300 million of additional debt financing with ESL

By Susanna Moon

Chicago, Aug. 25 – Sears Holdings Corp. arranged $300 million of additional debt financing with ESL Investments, Inc. in August, according to the 10-Q filing for the quarter ended July 30 with the Securities and Exchange Commission.

The debt will be secured by a junior lien against the company’s inventory, receivables and other working capital.

Under the terms, the company may choose to offer to third-party investors the right to participate in another $200 million of debt financing on the same terms and conditions.

The financing is expected to close within seven to 10 business days.

As announced, some of the company’s subsidiaries obtained a $500 million 8% 15-month committed secured loan facility on April 8.

Of the amount, $250 million was funded on April 8 and up to another $250 million could be drawn under the facility due July 2017.

Proceeds were slated for “additional financial flexibility as [the company] executes on its transformation to a more asset-light integrated retailer leveraging its membership-based Shop Your Way program,” according to a previous company announcement.

Sears is a Hoffman Estates, Ill.-based retailer.

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