Good news for J.C. Penney

J.C. Penney announced a positive development on the financial front.



The department store retailer announced it has successfully completed refinancing its $2.25 billion five-year senior secured term loans, which should generate about $24 million in interest expense savings.



“We proactively pursued a refinancing due to favorable market conditions and the ability to further enhance our financial flexibility and liquidity position,” said CEO Marvin Ellison. “This reflects the improved performance of our company and the market’s confidence in the company’s strategic goal of achieving $1.2 billion in EBITDA by 2017.”



In a blog on barrons.com, Jeff Van Sinderen, senior analyst, B. Riley & Co., described the refinance, which was completed on schedule, as one in a series of events that reflect the progress Penney is making in reducing debt and interest expense.



‘The sales-lease-back of headquarters real estate is the next major transaction that we expect to see closed (sometime this summer), and that should keep the company on track to pay down another $400 million to $500 million in debt this fiscal year,” he wrote. “With numerous initiatives soon to kick-in (Sephora roll-out, center-core appliances, plus size, flooring/furniture pilots, etc.), JCPenney seems set up for a positive 2Q.”