Sears set to end credit pact with Bank of America

HOFFMAN ESTATES, Ill. Sears Holdings said last Friday that it would terminate a credit agreement with Bank of America after the bank would not agree to renew the agreement under existing terms.

The agreement was for a 364-day secured facility with a commitment amount of up to $1 billion.

Shares of Sears fell 3% in after-hours trading to $101.33 from a close of $104.72 on Friday after it said in a U.S. Securities and Exchange Commission filing that the secured credit agreement would end in July. However, the company said the termination of the agreement was not expected to have any effect on its liquidity.

Sears said $1.6 million in letters of credit were outstanding under the agreement, while substantially all of its outstanding letters of credit were issued under a $4 billion, five-year revolving credit facility that expires in March 2010.