Fitch rates J.C. Penney loan BB-

Fitch Ratings said it assigned a BB-/RR1 rating to J.C. Penney's new five-year $1.75 billion senior secured term loan facility.

The closing of the new facility is contingent upon the successful tendering or defeasance (of at least two-thirds of the amount outstanding) of the $225 million in debentures due 2023.

In addition, Fitch affirmed the issuer default ratings on J.C. Penney Co., Inc. and J.C. Penney Corp., Inc. at B-.

The outlook is negative.

The new $1.75 billion term loan facility will be secured by: (a) First-lien mortgages on owned and ground-leased stores with an aggregate value of not less than $400 million, the company's headquarters and related land and nine owned distribution centers; (b) a first-lien on intellectual property, machinery and equipment; (c) a stock pledge of J.C. Penney Corp. and all of its material subsidiaries and all intercompany debt; and (d) second-lien on inventory and accounts receivable that back the $1.85 billion asset-backed facility.

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