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Breaking News from CNBC's David Faber: Goldman Rounds Up Financing for J.C. Penney

WHEN: TODAY, FRIDAY, APRIL 26TH

WHERE: CNBC'S "STREET SIGNS"

Following is the unofficial transcript of breaking news from CNBC's David Faber. Following is a link to the news on CNBC.com: http://video.cnbc.com/gallery/?play=1&video=3000164465. All references must be sourced to CNBC.

DAVID FABER: I'M DAVID FABER WITH SOME BREAKING NEWS INVOLVING JC PENNEY. THERE'S BEEN A LOT OF FOCUS ON THAT STOCK TODAY GIVEN SOROS FUND MANAGEMENTS DECISION TO TAKE A SIGNIFICANT STAKE IN THE RETAILER ALTHOUGH THE SOROS IS IN NAME ONLY. GEORGE SOROS HAD NOTHING TO DO WITH THAT DECISION MORE LIKELY PETER CARUSO THE ANALYST WHO FOLLOWS RETAIL AT THAT COMPANY. BUT WHAT IS CENTRAL TO THE NEAR TERM FUTURE OF JC PENNEY IS ITS ABILITY TO FUND ITSELF GIVEN IT IS AT LEAST STILL AT THIS POINT BURNING THROUGH CASH. AND ON THAT FRONT WE MAY SOON HEAR SOME NEWS AS THE COMPANY AND ITS ADVISORS BOTH BLACKSTONE AND CENTERVIEW GO THROUGH A VARIETY OF PROPOSALS TO TRY TO DECIDE WHAT IT IS THEY WANT TO DO TO RAISE WHAT SEEMS VERY LIKELY TO BE A SIGNIFICANT AMOUNT OF DEBT NOT EQUITY. NOW THERE'S BEEN FEAR OUT THERE THAT THERE WOULD BE PERHAPS SOME DEBT OFFERING ALSO ACCOMPANIED BY DILUTED EQUITY OFFERING THAT IS NOT THE CASE AT LEAST ACCORDING TO WHAT I AM PICKING UP IN THE CAPITAL MARKETS AT THIS POINT. MORE LIKELY, WELL SOMETHING BEING PUT TOGETHER RIGHT NOW BY GOLDMAN SACHS SOURCES TELLING ME GOLDMAN IS IN THE MIDST OF ROUNDING UP A FINANCING FOR JC PENNEY. IT HAS COMMITMENTS FOR ROUGHLY OF ABOUT $1.75 BILLION RIGHT NOW FOR A TERM LOAN WITH A COUPON SLIGHTLY ABOVE 7% AND NO EQUITY COMPONENT. THAT LOAN WOULD BE BACKED BY REAL ESTATE, REAL ESTATE LEASES THEY HAVE A NUMBER OF BELOW MARKET LEASES THAT HAVE VALUE. AND I'M TOLD SOME OTHER ASSETS. AS I SAID JC PENNEY AND ITS ADVISORS STILL DECIDING ON HOW THEY WANT TO GO ABOUT TAPPING DEBT MARKETS BUT THIS SIGNIFICANT LOAN THAT GOLDMAN HAS PUT TOGETHER MAY BE THE AVENUE THEY CHOOSE TO GO DOWN OF COURSE JC PENNEY DOES APPEAR TO HAVE A LOT OF DOLLARS AVAILABLE TO IT AT LEAST IN TALKING TO PEOPLE IN THE CAPITAL MARKETS. MANY HEDGE FUNDS HAVE COME FORWARD AND SAID WE ARE INTERESTED IN AT LEAST POTENTIALLY PROVIDING CREDIT TO THE STRUGGLING RETAILER. THIS WOULD AT LEAST HELP THE COMPANY ON THE BALANCE SHEET SIDE BUT OF COURSE THE FUNDAMENTAL PICTURE WELL THAT REMAINS VERY MUCH MUDDY.


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