Retailer J.C. Penney increased its borrowing capacity under a bank credit facility by $100 million to $1.85 billion and expanded an option to borrow more at a later date, raising concerns among analysts as it works on a turnaround.
"As we enter the second year of our transformation, today's announcement reflects the confidence of our banking group in our long-term strategy and further strengthens our liquidity position as we continue to execute our plan," J.C. Penny Chief Financial Officer Ken Hannah said in a statement on Tuesday.
However, analysts expressed reservations about the move as it would increase the company's borrowing capacity from $1.75 billion to $2.25 billion.
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The new arrangements included a $150 million increase in the credit facility's accordion feature to $400 million and a $250 million increase in an additional feature, analysts said. An accordion feature allows a borrower to expand a credit facility at a later date.