Macy’s raises $ 4.5 billion to consolidate funds when stores reopen and soaring stocks

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(Reuters) – Macy’s Inc. said Monday it has raised a total of $ 4.5 billion (£ 3.54 billion), including $ 3.15 billion in new borrowing against its real estate assets, while the major chain stores trying to navigate through the fallout from the COVID-19 pandemic.

The shares of the company, which also owns Bloomingdale’s, jumped about 11% after the bell.

“The high quality of our real estate portfolio has positioned us well to execute this offer,” said CEO Jeff Gennette in a statement.

Gennette said the funding gives the retailer enough flexibility and cash to run the business for the foreseeable future.

The company has said it will be able to buy new inventory when the stores reopen and pay off debts to come in fiscal years 2020 and 2021.

Like other retailers, Macy’s has been severely affected by store closings due to the coronavirus health crisis that has forced governments to announce closings to curb the spread of the infection.

The financing raised includes a previously announced $ 1.3 billion bond offering.

Offer funds and existing cash will be used to repay outstanding borrowings under an unsecured $ 1.5 billion credit facility. The retailer said it had modified the $ 1.5 billion credit agreement to reduce the available credit commitment and modify the terms of the agreement.

(Report from Nivedita Balu to Bengaluru; Edition by Shinjini Ganguli)

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