Hoffman Estates, Ill. Sears Holdings Corp. said in a filing with the Securities and Exchange Commission on Friday that Bank of America will not renew its $1 billion long-term credit amendment under its existing terms. The agreement is scheduled to end in July. As of Friday, only $1.6 million in letters of credit were outstanding under that agreement, according to Sears.
Sears said most of its outstanding credit is issued under its $4 billion, five-year revolving credit facility which expires March 2010, which has a $1.5 billion letter of credit sublimit.
The company said it is now using its second letter of credit so the termination will not have any effect on its liquidity.
Banks are tightening credit lines to retailers amid a weakening economy. On Tuesday, HSBC and Bank of America said they will either cancel or not renew lines of credit to women's apparel retailer Talbots Inc.