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J.C. Penney completes new $750M credit facility


Plano, Texas J. C. Penney Corp. has completed a new three-year $750 million bank credit facility. The new facility replaces a $1.2 billion credit facility that was scheduled to mature in April 2010.

The company had not utilized the $1.2 billion facility for cash borrowings. No borrowings are expected under the new facility other than to provide support for the issuance of letters of credit.

The facility may be used for general corporate purposes and will mature in April 2012.

In addition, the facility’s financial covenant thresholds for both the leverage ratio and fixed charge coverage ratio have been set in alignment with the company’s 2009 operating plan and adjusted to remove the impact of non-cash pension expense.

The facility is secured by the company’s inventory, which can be released upon attainment of certain credit rating levels.

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