By Phil Wahba
(Reuters) - J.C. Penney Co Inc
The senior secured term loan facility, backed by the department store chain's real estate and other assets, may be used to fund working capital needs and for other corporate purposes, Penney said in a statement.
The financial terms were not disclosed.
Penney's announcement confirms what sources told Reuters on Friday.
Penney shares were up 1.8 percent to $17.30 in early trading as the move eased fears about Penney's financial situation.
"The cash infusion will stabilize JCP and put it on a path toward recovery," Gilford Securities analyst Bernard Sosnick wrote in a research note, also praising the company for not issuing equity to raise money, a move that would dilute investors' holdings.
The move makes the odds "remote" that Penney would default on its debt before its next payment on $200 million in bonds which comes due in October 2015, Piper Jaffray analyst Alex Fuhrman, who nonetheless noted there are no signs yet of improvement in Penney's business and warned the retailer is still burning through a lot of cash.
The Goldman financing comes as retailers gear up to place orders for the year-end holiday period, during which retailers often make a third of annual revenue and half of annual profit.
Penney recently borrowed $850 million from its $1.85 billion revolving credit facility to help buy inventory and revamp its business strategy.
Penney is allowed to use the money to buy back or pay down its outstanding debt maturing in 2023.
The moves to improve its finances come after a disastrous year in which Penney revenue plummeted 25 percent following a botched attempt by Chief Executive Ron Johnson to reinvent the company, in part by eliminating the use of coupons. Johnson was ousted earlier this month.
Penney ended its fiscal year on February 2 with $930 million in cash on hand, down from $1.51 billion a year earlier, a drop that would have been worse if not for deep reductions in expenses.
The company's real estate includes 429 of its 1,100 stores, a larger proportion than its rivals, as well as land at its Plano, Texas, headquarters.
(Reporting by Phil Wahba in New York; Editing by Gerald E. McCormick, John Wallace and Nick Zieminski)