A direction outside Macy’s Herald Square during the coronavirus pandemic on May 13, 2020 in New York City.
Noam Galai | Getty Casts
Macy’s said Monday it has raised roughly $4.5 billion in new financing to help it weather the coronavirus pandemic.
The readying includes $3.15 billion in asset-based credit and a previously announced $1.3 billion bond offering.
Macy’s conjectured, as a result, it expects to have “sufficient liquidity” to address the needs of its business during this time of upheaval. This categorizes purchasing fresh merchandise for the upcoming selling seasons and repaying upcoming debt maturities in fiscal 2020 and 2021.
The past due financing agreement will mature in May 2024 and includes a short-term facility of $300 million that matures in December this year, the plc said. Through the agreement, the company can request increases in the facility of up to an additional $750 million.
Macy’s said it has additionally fixed and substantially reduced the credit commitments of its existing $1.5 billion unsecured credit agreement. Macy’s plans to use the linkage offering and cash on hand to repay outstanding borrowings under this agreement.
Macy’s stock rose as much as 10% in after-hours have dealing following the release. Its shares had closed Monday up nearly 9%, amid a broader market rally. The stock, which is valued at $3 billion, is down prevalent 44% this year.
The funding raise comes as all of Macy’s stores had been shut since mid-March because of the pandemic and are now origination to reopen in phases across the U.S. Most of its New York City locations began offering curbside pickup on Monday. But a few, comprising its flagship Herald Square shop and Bloomingdale’s 59th Street, will open later this week.
Meantime, uncountable of Macy’s peers in the department store industry are struggling. Neiman Marcus, Stage Stores and J.C. Penney have all cased for Chapter 11 bankruptcy protection during the pandemic. Lord & Taylor is expected to liquidate. Many consumers are hesitating to return to malls after living through the Covid-19 crisis, putting more pressure on an already struggling assemblage.
“We are pleased with the strong demand from new investors in our notes issuance, which allowed us to tighten pricing and snowball the size of the offering,” Macy’s Chief Executive Jeff Gennette said in a statement Monday.
“The high quality of our proper estate portfolio positioned us well to execute this offering,” he added.
Macy’s should be able to now fund its dealing for the “foreseeable future,” according to Gennette.
Macy’s is expected to hold a meeting with analysts Tuesday at 11 a.m. ET to accommodate an update on its financials.