Nordstrom (JWN) amends $800 million revolving line of credit and closes 8.75% secured debt offering of $600 million
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Nordstrom, Inc. (NYSE: JWN) continues to take precautionary measures to strengthen its financial position for the long term. The Company announced today the amendment of its $800 million revolving line of credit and the closing of its 8.75% secured debt offering of $600 million. These actions provide additional liquidity and flexibility in response to uncertainty related to the novel coronavirus (COVID-19).
Under the terms of the amendment, the revolving line of credit will be secured primarily by the Company’s inventory during periods when its leverage ratio (Adjusted Debt to EBITDAR) exceeds 4.0 times or its credit ratings drop below investment grade. During this period, minimum liquidity thresholds will be applied. Additional details of the amendment are included in the Company’s 8-K filing.
Nordstrom is well-positioned and has taken the following actions to date to increase its cash position and preserve financial flexibility:
- Exited fiscal 2019 with $850 million in cash, drew down $800 million on its revolving line of credit, and issued $600 million in secured debt financing
- Suspended quarterly cash dividends and share repurchases
- Executing further reductions of more than $500 million in operating expenses, capital expenditures and working capital, including ongoing efforts to realign inventory to sales trends
“The actions we are taking are to position ourselves best for our employees, customers and shareholders. This includes proactive steps to strengthen our financial flexibility, including our recent debt offering,” said Anne Bramman, chief financial officer, Nordstrom, Inc. “These measures will provide Nordstrom with additional liquidity and flexibility not just for the short-term but over the longer term as we emerge from this unprecedented time.”
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