Feb 12 J.C. Penney Co Inc has increased
its borrowing capacity under a bank credit facility to $1.85
billion and expanded the accordion feature of the facility to
$400 million, giving the retailer more flexibility as it works
on a turnaround.
"As we enter the second year of our transformation, today's
announcement reflects the confidence of our banking group in our
long-term strategy and further strengthens our liquidity
position as we continue to execute our plan," J.C. Penny Chief
Financial Officer Ken Hannah said in a statement on Tuesday.
The moves increased the borrowing capacity on the department
store operator's credit agreement to $2.25 billion from $1.75
billion, BMO Capital Markets analyst Wayne Hood said in a client
There were no changes in credit terms or covenants, Hood
"The credit risk profile of (J.C. Penney) continues to
escalate as the company potentially increases leverage to bring
about a so far disappointing transformation strategy," he added.
The company could not be immediately reached for comment.
The arrangement of the credit facility was co-led by J.P.
Morgan Securities LLC, Bank of America Merrill Lynch, Barclays
Capital and Wells Fargo Capital Finance, J.C. Penny said.
Chief Executive Ron Johnson said last week the company would
return to growth in 2013, despite severe sales declines in
Penney, which operates 1,100 department stores, began a
turnaround a year ago that called for the elimination of most
coupons and sales events. Long-term customers, trained for years
to seek out discounts, balked at the new pricing strategy and
reeled in purchases.