(Bloomberg) — Sears Holdings Corp. gained some breathing room in its comeback effort thanks to deals with some of the biggest names in finance.
Lenders including billionaire Bill Gates’s Cascade Investment LLC agreed to give the struggling retailer more time to repay debt. And MetLife Inc. will take on pension obligations for about 51,000 retirees, Sears said Tuesday in a statement. The Hoffman Estates, Illinois-based company climbed 5% to $8.24 at 10:40 a.m. in New York trading.
(Related: Q3 Pension Buy-Out Sales Reach 25-Year High)
Once the country’s largest retailer, Sears has racked up billions of dollars in red ink over the past five years amid a broader department-store slump as shoppers opt for discounters and Amazon.com Inc. Chief Executive Officer Eddie Lampert has shut stores and raised cash by selling or spinning off assets, including the Craftsman tool brand and Lands’ End clothing business.
Under one deal announced Tuesday, Sears wins more time to repay most of a $500 million secured loan facility that was to be due in two months. The company will repay just $100 million in July and extend the remainder of the loan until January, with an option to push out the maturity another six months. The lenders include Cascade and JPP, an entity tied to Lampert, who has thrown the company lifelines before.
Sears also said it will pass off $515 million in pension obligations to MetLife. That transaction will reduce volatility and expenses, helping the retailer reach its target to cut debt and pension obligations by $1.5 billion this fiscal year.