Struggling department store retailer strikes debt, pension obligations deals

Sears Holdings Corp. has bought itself a little more time with regard to the maturity of some debt. It also has offloaded some of pension liability.



The retailer announced on Tuesday it has reached an agreement to repay $100 million of its secured $500 million loan facility at its original maturity in July, and extend the remaining amount until January 2018. The agreement includes an option to extend the maturity for an additional six months, to July 2018.



Sears also has entered into a separate agreement to annuitize $515 million of its pension liability with Metropolitan Life Insurance Company, under which Metropolitan Life will pay future pension benefit payments to approximately 51,000 retirees. Sears previously announced it is working to reduce debt and pension obligations by $1.5 billion in fiscal 2017.



"This action is expected to have an immaterial impact on the funded status of our total pension obligations, but will serve to reduce the size of the company's combined pension plan, future cost volatility and plan administrative expenses," the company said in a statement.