Breaking News from CNBC's Kayla Tausche: JC Penney Offered Second Loan on Real Estate -- Sources
When: Today, Friday, April 19, 2013
Following is breaking news from CNBC's Kayla Tausche on CNBC.com. Here is a link to Tausche's story: http://www.cnbc.com/id/100655860. All references must be sourced to CNBC.
By Kayla Tausche, General Assignment Reporter
J.C. Penney could get more cash ahead of the all-important back-to-school shopping season.
Several banks, including Goldman Sachs and JPMorgan Chase, have proposed loans in the range of $500 million to $1 billion that would be secured by the company's real estate, according to sources familiar with the matter.
Following the news, J.C. Penney shares inched higher in premarket trade.
The value of J.C. Penney's 1,100 stores, one source estimated, was being tallied at around $2 billion.
It's unclear whether J.C. Penney will take out an additional loan, but the option is seen as a positive sign for investors, who remain worried the company's available liquidity could dry up before fully stocking for the crucial back-to-school period.
A real estate loan would be the second of such secured loans that the company has sought to shore up its cash. J.C. Penney, sources say, is also near closing a $500 million deal with Wells Fargo backed by its inventory, set to close in the coming days.
J.C. Penney is expected to evaluate the real estate options after the first loan closes and may ultimately decide not to go that route, sources say.
A J.C. Penney spokeswoman could not be reached for comment.
In the meantime, Standard & Poor's has issued a warning on J.C. Penney, saying that adding more secured debt to its balance sheet could lead to a downgrade of the company's CCC credit rating. The rating already indicates that the company's bonds are trading at high-risk, or "junk" levels.
— Written by CNBC's Kayla Tausche. Follow her on Twitter @kaylatausche
© 2013 CNBC.com
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