This Amendment No. 68 to Schedule 13D (this “Amendment”) relates to common shares, par value $0.01 per share (the “Holdings Common Stock”), of Sears Holdings Corporation, a Delaware corporation (“Holdings”). This Amendment amends the Schedule 13D, as previously amended, filed with the Securities and Exchange Commission by ESL Partners, L.P., a Delaware limited partnership (“Partners”), JPP II, LLC, a Delaware limited liability company (“JPP II”), SPE I Partners, LP, a Delaware limited partnership (“SPE I”), SPE Master I, LP, a Delaware limited partnership (“SPE Master I”), RBS Partners, L.P., a Delaware limited partnership (“RBS”), ESL Investments, Inc., a Delaware corporation (“ESL”), JPP, LLC, a Delaware limited liability company (“JPP”), and Edward S. Lampert, a United States citizen, by furnishing the information set forth below. Except as otherwise specified in this Amendment, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D, as previously amended, filed with the Securities and Exchange Commission (“SEC”).
Item 3. | Source and Amount of Funds or Other Consideration. |
Item 3 is hereby amended and supplemented as follows:
“On August 31, 2018, the Second Lien Borrowers elected to pay interest on the Second Lien Term Loan by increasing the principal amount of the Second Lien Term Loan. In connection with this election by the Second Lien Borrowers, the principal amount of the portion of the Second Lien Term Loan held by JPP and JPP II was increased accordingly, and no cash consideration was paid by either JPP or JPP II in connection with this increase to the principal amount of the Second Lien Term Loan. As a result of the foregoing, (i) JPP may acquire up to an additional 341,190 shares of Holdings Common Stock within 60 days upon the conversion of the Second Lien Term Loan into shares of Holdings Common Stock, and (ii) JPP II may acquire up to an additional 156,200 shares of Holdings Common Stock within 60 days upon the conversion of the Second Lien Term Loan into shares of Holdings Common Stock.
In a grant of shares of Holdings Common Stock by Holdings on August 31, 2018, pursuant to the Extension Letter between Holdings and Mr. Lampert, Mr. Lampert acquired an additional 159,574 shares of Holdings Common Stock. Mr. Lampert received the shares of Holdings Common Stock as consideration for serving as Chief Executive Officer, and no cash consideration was paid by Mr. Lampert in connection with the receipt of such shares of Holdings Common Stock.”
Item 4. | Purpose of Transaction. |
Item 4 is hereby amended and supplemented as follows:
“On September 12, 2018, Holdings, through the Consolidated RE Loan Borrowers, entities wholly-owned and controlled, directly or indirectly by Holdings, entered into a First Amendment (the “First RE Amendment”) to the Consolidated Loan Agreement (as amended by the First RE Amendment, the “Amended Consolidated Loan Agreement”), with JPP, as agent, and the Consolidated RE Loan Lenders, as lenders.
Immediately prior to the effectiveness of the First RE Amendment, a loan of approximately $756.4 million was outstanding under the Consolidated Loan Agreement, which loan was secured by a first priority lien on 68 real properties owned by the Consolidated RE Loan Borrowers. In connection with the First RE Amendment, the Consolidated RE Loan Lenders made an additional advance to certain of the Consolidated RE Loan Borrowers (the “Amendment Date Advance Borrowers”) in an aggregate principal amount of $75.0 million (the “Additional Advance”), such that the aggregate principal amount of the loan outstanding under the Amended Consolidated Loan Agreement was approximately $831.4 million. Pursuant to the First RE Amendment, the Amendment Date Advance Borrowers also granted the Consolidated RE Loan Lenders a first priority lien on an additional 20 real properties (the “New Properties”). The loan under the Amended Consolidated Loan Agreement, including the amount of the Additional Advance, matures on July 20, 2020 and is guaranteed by Holdings. No Consolidated RE Loan Borrower other than the Amendment Date Advance Borrowers will have any liabilities or obligations in connection with the Additional Advance.
After giving effect to the Additional Advance, approximately $108.1 million of the loan under the Amended Consolidated Loan Agreement, which as of closing is held by Cascade, is structured as a “first out” tranche evidenced by Note A and bears interest at LIBOR plus 6.50% per annum. The remainder of the loan under the Amended Consolidated Loan Agreement is evidenced by Note B, which as of closing is held by JPP and bears interest at LIBOR plus 9.00% per annum.