June 8, 2020 / 9:07 PM / a month ago

Macy's raises $4.5 billion to shore up funds as stores reopen, shares surge

FILE PHOTO: A shuttered Macy's store and empty parking lot are seen at the closed Palisades Center shopping mall during the coronavirus outbreak in West Nyack, New York, U.S., March 20, 2020. REUTERS/Mike Segar

(Reuters) - Macy’s Inc (M.N) said on Monday it raised a total of $4.5 billion, including $3.15 billion in new borrowings against its real estate assets, as the department store chain tries to navigate through the fallout from the COVID-19 pandemic.

Shares of the company, which also owns Bloomingdale’s, surged about 11% after the bell.

“The high quality of our real estate portfolio positioned us well to execute this offering,” Chief Executive Officer Jeff Gennette said in a statement.

Gennette said the funding gives the retailer sufficient flexibility and liquidity to steer the business for the foreseeable future.

The company said it would be able to purchase new inventory as stores reopen and repay upcoming debts in fiscal 2020 and 2021.

Like other retailers, Macy’s has been severely impacted from store closures due to the coronavirus health crisis that forced governments to announce lockdowns to curb the spread of the infection.

The raised funding includes a previously announced $1.3 billion in bond offering.

The funds from the offering and existing cash will be used to repay outstanding borrowings under an existing $1.5 billion unsecured credit agreement. The retailer said it has amended the $1.5 billion credit agreement to reduce the available credit commitment and modify the agreement’s covenants.

Reporting by Nivedita Balu in Bengaluru; Editing by Shinjini Ganguli

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