J.C. Penney obtains needed consents to amend 7 1/8% notes 2023

By Marisa Wong

Madison, Wis., May 21 - J.C. Penney Co., Inc. said its subsidiary J.C. Penney Corp., Inc. received tenders for $242,782,000 principal amount, or 95.41%, of its 7 1/8% debentures due 2023 as of 5 p.m. ET on May 20, the consent expiration of its cash tender offer and consent solicitation.

Holders who tendered their notes were deemed to have consented to proposed amendments to the notes. As previously noted, the company wants to eliminate most of the restrictive covenants and some events of default and other provisions in the indenture governing the notes.

Because the company received consents from holders of more than the required 66 2/3% principal amount, the company executed a supplemental indenture effecting the proposed amendments.

Holders who tendered their notes and delivered their consents by the consent expiration will receive the total consideration of $1,450 per $1,000 principal amount of notes. The total consideration, which includes a $50 consent payment, was recently increased from $1,350 per $1,000 of notes.

Those who tender after the consent date will receive $1,400 per $1,000 principal amount.

Holders will also receive accrued interest up to but excluding the payment date. The settlement date for notes tendered by the consent expiration is expected to be May 22.

The tender offer will run until at 11:59 p.m. ET on June 4, extended from May 28. The offer began April 30.

The consent solicitation was originally set to end on May 13. Tendered notes may no longer be withdrawn, as of the previous consent deadline.

Completion of the tender offer and consent solicitation is conditioned on the company obtaining debt financing with enough proceeds to fund the offer.

Because the company received enough consents to amend the notes, it said it does not expect to discharge any notes not tendered in the offer. Any notes that are not tendered and accepted for purchase are expected to remain outstanding after completion of the tender offer.

Goldman Sachs & Co. (800 828-3182 or collect 212 902-5183) is the dealer manager and solicitation agent for the offer. D.F. King (800 290-6427 or banks and brokers call 212 269-5550) is the tender and information agent.

J.C. Penney is a Plano, Texas-based operator of department stores.

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