Macy's Inc. said it raised a total of $4.5 billion, providing it with sufficient liquidity to fund operations and address business needs as the economy starts to recover from the COVID-19 pandemic.
The country’s largest department store retailer 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, Macy’s amended and substantially reduced the credit commitments of its existing $1.5 billion unsecured credit agreement. The retailer said it 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, Macy’s 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,” said Jeff Gennette, chairman and CEO, Macy’s. “The high quality of our real estate portfolio positioned us well to execute this offering.”
Additionally, the continued commitment from Macy’s bank group allowed the company to more than double the size of its 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,” Gennette said.