J. C. Penney Company, Inc. announced it has received $500 million of incremental bank commitments to increase the size of the revolving line of credit under its existing Senior Secured Asset-Based Credit Facility (“ABL”) to $2.35 billion from $1.85 billion. In connection with upsizing the revolving credit facility, the company also intends to prepay and retire the outstanding principal amount of its $500 million Term Loan previously issued under the ABL, which is scheduled to mature in June 2019. The company expects to close these transactions in December.

The company expects that retirement of the ABL Term Loan will reduce interest expense by approximately $20 million annually, beginning in 2016. The $2.35 billion ABL revolving line of credit, which will also mature in June 2019, will remain available for seasonal working capital needs and general corporate purposes.

Marvin Ellison, chief executive officer, said, “We proactively pursued this transaction to reduce our long-term debt and ongoing interest expense and to further enhance our financial flexibility while maintaining our strong liquidity position as we continue to make progress on our goal of $1.2 billion in EBITDA by 2017.”

The arrangement and syndication of the revolving credit facility increase will be co-led by Wells Fargo, J.P. Morgan, Barclays, Bank of America Merrill Lynch, Citizens Bank, Regions Bank and HSBC.