Boston, MA 09/11/2014 (wallstreetpr) – According to recent reports, J C Penney Company Inc (NYSE:JCP) has decided to come up with debt offering to raise additional fund in order to finance various short-term and long-term organizational obligations. Recently JCP announced that its subsidiary J. C. Penney Corporation, Inc. had upsized and priced its public offering. J.C. Penney Corp. had priced the senior unsecured notes at $400 million aggregate principal amount. These notes have 8.125% interest payable annually and are due by year 2019. JCP will be co-obligor for this offering.
Insights of JCP’s new offering:
As per the information provided by people close to this matter, earlier JCP decided to come up with only senior unsecured notes worth $350 million amount, but then due to increased funding requirement, it changed the amount to $400 million. The pricing of these notes has been done 100% on their face value. As per J C Penney Company Inc (NYSE:JCP), the YTM (Yield to maturity) of these notes for the entire duration will be fixed at 8.125%. The offering is available till September 15, 2014 as of now, but it can be further extended in accordance with market conditions.
The net proceedings of these senior unsecured notes will be used in funding various transaction fees, expenses, tender consideration and contemporaneous tender offers. The firm will use this proceeding in buying cash up to $300 million aggregate principal amount of 6.875% Medium-Term Notes due by 2015. Other than it, J C Penney Company Inc (NYSE:JCP) will also fund the buying process of 7.65% Debentures due by year 2016 and 7.95% Debentures due by year 2017 from the net proceedings.
If J C Penney Company Inc (NYSE:JCP) is left with any additional amount after funding all the above transactions, then it will look to use the remaining amount of proceedings for general corporate purposes. It may also think about retiring the complete or a portion of its indebtedness.