Sears Holdings Corp. (SHLD), the unprofitable retailer controlled by Edward Lampert, is seeking a term loan of as much as $1 billion to pay down borrowings under a revolving credit line.
A meeting with lenders to discuss the loan, which would mature in June 2018, is scheduled for Sept. 18, according to a person with knowledge of the transaction who wasn’t authorized to speak publicly and asked not to be identified.
The term loan would be issued under an existing credit pact that provides Sears with a $3.275 billion asset-based revolving credit line, the retailer said today in a statement distributed PR Newswire. The Hoffman Estates, Illinois-based company has about $1.1 billion available under the revolver, according to data compiled by Bloomberg.
Sears’s net loss in the three months ended Aug. 3 widened to $194 million from a deficit of $132 million a year earlier as loyalty program members used more discounts and appliance sales fell.
Under a revolver, money can be borrowed again once it’s repaid; in a term loan, it can’t.
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