Sears Holdings Corp. said it has borrowed another $100 million from associates of ESL Investments, a hedge fund managed by Sears CEO Edward Lampert, according to a filing the company made with the SEC on Oct.4.
Under the terms of the loan, Sears may receive the additional short-term credit line by Dec. 1. The loan carries an annual interest rate of 11% and is due April 3, 2018, according to the filing, and Sears will have to provide collateral.
"We continue to focus on actions to provide the company with additional financial flexibility to generate liquidity and demonstrate our ability to manage our business while meeting all of our financial obligations," Sears spokesman Howard Riefs told S&P Global Market Intelligence in an email on Oct. 6.
The loan is the latest credit that Lampert's fund has extended to Sears, which operates roughly 670 stores in the U.S., according to S&P Capital IQ.
In January, ESL agreed to lend Sears $500 million. That line of credit, which Sears exhausted earlier this year, is due July 20, 2020, with 8% annual interest. Separately, Lampert's fund agreed to loan Sears $200 million at a 9.75% annual interest rate in July. That loan has a maturity date of 151 days, according to the terms of the deal.
As of Oct. 6, the aggregate principal amount Sears owed ESL was $499.4 million, Riefs said.
Sears has been able to pay back some of its loans this year using real estate transactions. In June, the company said it closed on over $200 million in real estate deals, part of which it used to pay down an April 2016 loan worth $500 million.