The pandemic has affected not only people and small businesses, but also the big players, especially those who are part of the fashion, cosmetics, and such industries. One major department store chain that felt the effects is Macy’s, which was hugely impacted by store closures.
But it seems that those days are over because Macy's announced that it raised $4.5 billion in borrowings against its real estate assets. According to its CEO, the company now has enough flexibility and liquidity to manage the business as the stores are reopening.
The funding consists of $3.15 billion in asset-based credit, and a bond offering worth $1.3 billion.
The funds are meant to repay the previous borrowings - a $1.5 billion unsecured credit agreement. Moreover, the money will be spent on purchasing new merchandise for the next selling seasons, and for paying the debt maturities for the fiscal 2020 and the future 2021.
This new agreement is to mature in May 2024.
Macy's case is one of the happiest because many of its peers had to file for bankruptcy, such as Neiman Marcus, Stage Stores, and J.C. Penney. Others might liquidate their businesses entirely, according to specialists.
The announcement was auspicious, as the stock price rose 8.9% during the regular trading hours, and reached 11% in after-hours. Overall, it lost 44% this year.
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Sources: reuters.com, marketwatch.com, cnbc.com