Sears Holdings Corp (NASDAQ:SHLD) stock was up on Thursday following news that the company has a new $200 million loan.
The $200 million loan that Sears Holdings Corp is borrowing is a secured standby letter of credit. It comes from JPP, LLC and JPP II, LLC. These are all affiliates of hedge fund ESL Investments, Inc. Citibank, N.A. is serving as the administrative agent and issuing bank for the loan.
Sears Holdings Corp also has the option to borrow more than just $200 million. That amount is just what it is borrowing initially. There is also an option for it to borrowing an additional $300 million from the lenders, which would bring the total loan to $500 million.
“As Sears Holdings has consistently shown, we will take actions to adjust our capital structure, generate liquidity and manage our business to enable us to execute on our transformation while meeting all of our financial obligations,” Jason M. Hollar, Sears Holdings Corp’s CFO, said in a statement. “This new standby letter of credit facility further demonstrates that Sears Holdings has numerous options to finance our business strategy.”
This isn’t the first time that Sears Holdings Corp has reached out to ESL Investments for some help with its finances. The hedge fund is owned by Eddie Lampert, the Chairman and CEO of SHLD. Lampert and ESL Investments have lent over $800 million to the retail company over the last two years. This doesn’t include the most recent loan, reports Business Insider.
SHLD stock was up 3% as of Thursday morning, but is down 58% year-to-date.
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