Sears Canada Inc. announced that it has extended the term of its senior secured revolving credit facility to May 2019 and has reduced the total credit limit from $800 million to $300 million. Currently, the revolving facility is undrawn.
"The existing facility has been undrawn, even for seasonal purposes, since March of 2012," said Douglas C. Campbell, President and Chief Executive Officer, Sears Canada Inc. "This amendment prudently right-sizes our credit facility to reflect our current borrowing base and will also allow us to reduce our financing costs by lowering our annual undrawn fees on the facility by over 70%. Together with our existing cash flow and working capital, this will provide us the flexibility we need to meet our long term goals."
Sears credit facility is held by a syndicate of lenders arranged and administered by Wells Fargo Capital Finance, part of Wells Fargo & Company (NYSE: WFC). The original maturity was September 10, 2015. The credit facility is secured with a first lien on inventory and credit card receivables.
About Sears Canada
Sears Canada is a multi-channel retailer with a network that includes 176 corporate stores, 229 Hometown stores, over 1,400 catalogue and online merchandise pick-up locations, 96 Sears Travel offices and a nationwide repair and service network.