Quarterly report pursuant to Section 13 or 15(d)

Subsequent Event

v2.4.0.8
Subsequent Event
3 Months Ended
May 03, 2014
Subsequent Events [Abstract]  
Subsequent Event
Subsequent Event

On May 14, 2014, JCP entered into a commitment letter (Commitment Letter) with Wells Fargo Securities, LLC, Wells Fargo Bank, National Association, Bank of America, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, JPMorgan Chase Bank, N.A., Barclays Bank PLC and Goldman Sachs Bank USA (collectively, the Commitment Parties), under which the Commitment Parties have committed, subject to the terms and conditions set forth in the Commitment Letter, to provide JCP with a $2.35 billion senior secured asset-based revolving credit and term loan facility (2014 Credit Facility). The 2014 Credit Facility will replace the 2013 Credit Facility and is expected to mature five years from the closing date. As with the 2013 Credit Facility, borrowing availability under the 2014 Credit Facility will vary according to levels of inventory, credit card receivables and accounts receivable. The 2014 Credit Facility will be secured by collateral substantially similar to the 2013 Credit Facility.

All borrowings under the 2014 Credit Facility will accrue interest at a rate equal to, at the Company’s option, a base rate or an adjusted LIBOR rate plus a spread. The proceeds of the 2014 Credit Facility will be used (a) to repay or refinance all or a portion of the outstanding borrowings under the 2013 Credit Facility, (b) to pay costs, expenses and fees in connection with the 2014 Credit Facility and other related transactions, and (c) for working capital and general corporate purposes. The 2014 Credit Facility will be guaranteed by J. C. Penney Company, Inc., JCP, Purchasing and certain of JCP’s subsidiaries.

The commitment by the Commitment Parties to provide the 2014 Credit Facility is subject to, among other things, execution of a definitive loan agreement and other loan documentation and the satisfaction of other customary conditions precedent for financings of this type.